We present a novel solution to the problem of thickness estimation from in situ ellipsometry measurements. A non-linear dynamic estimator is designed and implemented using the Extended Kalman Filter (EKF) theory. Major advantages of this scheme include fast data processing, and robustness to measurement noise and errors in the initial film thickness estimates. Since the number of function evaluations is much smaller than in the traditional non-linear least squares approach, EKF is computationally very efficient and has great potential for real-time applications. This technique is demonstrated on both simulated and experimental data gathered during plasma etching of a polycrystalline silicon (poly-Si) on silicon dioxide (SiO2)on silicon (Si) stack.