A sensor for sensing the angular position of a rotor includes a code disk rotatable with the rotor. A first light guide is rotatable with the rotor. The light guide directs light from a light source through the code disk to a detector. A second light guide has first and second arms directing light from a light source to the detector. A light modulator modulates the light directed from one of the first and second arms to the detector. A method for determining the angular position of the rotor includes providing the code disk with a plurality of individual designation areas located near the outer peripheral edge of the disk. Each designation area has a plurality of digital bits. The detector detects the digital bits from a selected portion of the code disk. The selected portion is functionally related to the angular position of the rotor. A bit center is determined for each bit of the selected portion. The bit is determined to be a 1 or a 0 by determining a value related to the bit based on the determined bit center and comparing the determined value against a threshold. The determined 1's and 0's are monitored to identify a code word. The angular position of the rotor is identified based upon the identified code word.