Digital holography uses CCD camera to replace conventional photographic plates for holographic recording, it features quick digital recording, high precision and reliability, no wet chemical processing, etc. Using Digital Micromirror Device (DMD) and liquid crystal display (LCD) as spatial light modulator (SLM) to dynamically display digital holograms and computer-generated holograms (CGHs) for three-dimensional holographic display could form the basis of future holographic TV and movie concepts, but due to the low spatial resolution of CCD and SLM, the optically reconstructed image of digital off-axis hologram captured by CCD and displayed on SLM has very small diffraction angle and is not likely be separated spatially from zero-order and twin images, it results in the low signal-to-noise (SNR) and image brightness. In this paper, a new two-step method, which involves in filtering in frequency domain and rebuilding of filtered hologram with high contrast, is proposed to process the original digital hologram and improve its optically reconstructed image quality for 3-dimensional dynamic holographic display. The first step is calculating the Fourier transform of original digital hologram, and using a proper window mask as spatial filterer to eliminate the zero-order component in the frequency domain. The second step is calculating the inverse Fourier transform of filtered spectra only containing the object and conjugate components, then rebuilding the filtered hologram with high contrast. Theoretical calculation shows that the optically reconstructed image quality of filtered digital hologram is much better than that of original digital hologram, the merit factors of SNR and image brightness of filtered hologram are all increased by approximately 200%. Then a dynamic digital holographic display system based on DMD is constructed to project the original and filtered digital holograms for comparative investigation, and the experimental results also show that the optically reconstructed image of the filtered digital hologram is visually much clearer and brighter than that of the original digital hologram. The image enhancement method and the dynamic holographic display setup demonstrated in this paper can be expected to find the practical applications in dynamic three-dimensional display, three-dimensional medical imaging, virtual reality, etc.