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To establish improved therapies for patients suffering from severe neurological and psychiatric diseases, a demand controlled and desynchronizing brain-pacemaker has been developed with techniques from statistical physics and nonlinear dynamics. To optimize the novel therapeutic approach, brain activity is investigated with a Magnetoencephalography (MEG) system prior to surgery. For this, a real time data acquisition system for a 148 channel MEG and online signal processing for artifact rejection, filtering, cross trial phase resetting analysis and three-dimensional (3-D) reconstruction of the cerebral current sources was developed. The developed PCI bus hardware is based on a FPGA and DSP design, using the benefits from both architectures. The reconstruction and visualization of the 3-D volume data is done by the PC which hosts the real time DAQ and pre-processing board. The framework of the MEG-online system is introduced and the architecture of the real time DAQ board and online reconstruction is described. In addition we show first results with the MEG-Online system for the investigation of dynamic brain activities in relation to external visual stimulation, based on test data sets.