Based on a novel method for overcoming DC drift in RF subcarrier phase detection scheme for fibre optic sensors we propose an improved method for the measurement of small displacements and vibrations. The method works in open loop and is characterized by low distortions in the modulation process, good signal-to-noise ratio and low cost. Considering the receiver ideal, we obtained for the measurements of small distances a minimum of 0.74 ? m with a 6.6 × 10-7 dB dynamic range. The system can be exploited in the measurement of small distances, vibrations and seismic detection.