A second order of IDWA (Incremental data weighted averaging) technique is proposed to improve 8-bit digital-to-analog convertor (DAC). In addition, this paper discusses the impact of mismatch between DAC unit elements. The Proposed IDWA/8-DAC circuits, which results in a completely second order mismatch noise shaping while solving in band tone problem. The simulation results show the effectiveness of the IDWA technique in reduction of inband tones, also IDWA technique proves its ability to solve DAC unit elements mismatch. The inband tones are converted into a broadband. It was found that IDWA algorithm proves its ability to solve this problem. The inband tone reduction is improved 8 dB if, element mismatch, =0.01 and 7 dB if =0.08 with proposed IDWA, thus improving the DAC performance if compared with DAC performance without using IDWA circuit. MATLAB (V.7.12) program is used for simulation.