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Multiscale error diffusion is superior to conventional error diffusion methods in digital halftoning as it can completely eliminate directional hysteresis. However, there is a bias to favor a particular type of dot in the course of the halftoning process. A new multiscale error diffusion method is proposed to improve the diffusion performance by reducing the aforementioned bias. The proposed method can also eliminate the boundary effect found in conventional multiscale error diffusion methods and preserve the local features of the input image in the output. This is critical to the quality when the resolution of the output is limited by the physical constraints of the display unit.