OPTRA is developing a next generation digital micromirror device (DMD) based two-band infrared scene projector (IRSP) with infinite bit depth independent of frame rate and an order of magnitude improvement in contrast over the state of the art. Traditionally, DMD-based IRSPs have offered larger format, superior uniformity, and pixel operability relative to resistive and diode arrays. However, they have been limited in contrast and also by the inherent bit depth/frame rate tradeoff imposed by pulse width modulation (PWM). OPTRA’s high dynamic range IRSP (HIDRA SP) has broken this dependency with a dynamic structured illumination solution. The HIDRA SP uses a source-conditioning DMD to impose the structured illumination on two projector DMDs—one for each spectral band. The source-conditioning DMD is operated in binary mode, and the relay optics that form the structured illumination act as a low-pass spatial filter. The structured illumination is, therefore, spatially grayscaled and more importantly is analog with no PWM. In addition, the structured illumination concentrates energy where bright objects will be projected and extinguishes energy in dark regions; the result is a significant improvement in contrast. The projector DMDs are operated with 8-bit PWM; however, the total projected image is analog with no bit depth/frame rate dependency. We describe our progress toward the development, building, and testing of a prototype HIDRA SP.