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We propose a novel dynamic display approach using a handheld projector embedded with an ability to be aware of obstructing objects, called clutters. One camera is fixed on a projector to retrieve surface information. By integrating multiple target tracking knowledge using particle filters and gabor filters, the appearance and disappearance of unknown clutters are monitored. As a result, the unknown number of clutters can be tracked efficiently, while spurious objects are filtered out. No computation effort for tracking will be expended unless those clutters are persistently detected. At every time step, the projection target area adapts itself to suit with current situations of clutters and a projector. The biggest undistorted target area is placed on the clutter-free area adaptively with respect to the previous locations. The simulation results revealed that the system is effective for creating clutter-aware dynamic projection when a projector and clutters are moving in an unpredictable manner.