A method for detecting backlash and adjusting driveline variables, includes measuring torque transmitted between components across a torsional discontinuity, measuring driveline twist across the discontinuity, using a ratio of driveline twist divided by torque and an inverse of driveline stiffness to determine whether the driveline is entering, exiting or in a backlash zone, and using measured driveline twist and torque at the backlash zone to adjust reference values of driveline twist and torque.