The integration of a Dual Mass Flywheel (DMF) in the conventional vehicle driveline leads to various benefits, and hence today it has established its position in many passenger cars and light trucks. Transmission and driveline oscillations are reduced by mechanically decoupling the transmission from the periodic combustion events that excite the engine crankshaft, improving driving comfort and reducing transmission stresses. For systems with conventional single mass flywheel (SMF) reliable engine control systems have already been developed. However, the complexity of the driveline increases with the integration of a DMF. Hence, in the future conventional engine control systems may require adaptation, modification or even replacement, in order to guarantee the optimal control of engines equipped with advanced DMF systems. Over time, various methods have been proposed for cylinder balancing using a wide range of different and often expensive sensing techniques e.g. using acceleration transducers or by measuring the in-cylinder or exhaust manifold pressures directly. However, cost, reliability and packaging constraints mean that until now signals derived from the engine's existing crankshaft position sensor, i.e. the angular velocity or acceleration of the crankshaft, have generally been used to perform the important task of cylinder balancing. This approach works well for engines with a limited number of cylinders connected to relatively simple drivelines. Nevertheless in some circumstances torque reactions from the DMF or the rest of the vehicle driveline can be misinterpreted as cylinder imbalance; even when all cylinders are perfectly balanced. In this paper, a novel cylinder balancing method, for both diesel and gasoline engines, is introduced which uses a dynamically reconstructed continuous engine torque signal. A state space model of the DMF is used to estimate the engine torque. Cylinder imbalance can be detected and corrected far more rapidly and reliably when the reconstructed instantaneous engine torque is used instead of commonly used signals simply derived from the crankshaft velocity or acceleration. The reconstructed engine torque can also be used to provide efficient and robust solutions for various other engine control and diagnosis purposes, e.g. OBD-misfire detection, thus eliminating the need to install multiple additional sensors in the vehicle. These aspects are particularly important for low to mid-cost vehicles.