A dynamic error correction system for a bi-directional digital data transmission system. The transmission system of the present invention includes a transmitter adapted to encode information into a signal. A receiver receives the signal and decodes the information encoded thereon. The signal is transmitted from the transmitter to the receiver via a communications channel. A signal quality/error rate detector is coupled to the receiver and is adapted to detect a signal quality and/or an error rate in the information transmitted from the transmitter. The receiver is adapted to implement at least a first and second error correction process, depending upon the detected signal quality/error rate. The first error correction process is more robust and more capable than the second error correction process. The receiver coordinates the implemented error correction process with the transmitter via a feedback channel. The receiver dynamically selects the first or second error correction process for implementation in response to the detected signal quality/error rate and coordinates the selection with the transmitter such that error correction employed by the receiver and transmitter is tailored to the condition of the communications channel.