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The problem of narrowband interference cancellation (NBIC) in chaos communication systems is investigated here. A novel two-stage NBIC algorithm based on a dynamic-based estimator called the minimum phase space volume technique is proposed. This two-stage NBIC algorithm can be applied to different kinds of chaos communication systems. In particular, two representative categories of chaos communication systems, namely, differential chaos shift keying and chaotic parameter modulation are considered here for the NBIC investigation. It is shown that the proposed two-stage NBIC algorithm is effective for both chaos communication systems. In addition, chaos based communication systems are found to have improved interference suppression capability with respect to the conventional statistic-based spread spectrum (SS) system. The proposed two-stage dynamic-based NBIC technique is applied to suppress NBI when the chaos modulation techniques are applied in power-line communications.