A display method and system includes a module that intercepts the lightfield from an ambient Real World Scene in an observer's direct line-of-sight, 102, and then routes it through a spatial light modulator where the Scene forms an image. During a first portion of the frame time, selective pixels corresponding to the real world scene image on the SLM are modulated for their transparency or opacity and routed to the observer's eye. In a second portion of the frame time, a Digital computer generated Virtual image is created by spatially multiplexing a second illuminant on the same SLM and then routing it to the observer's eye. The resultant time-averaged image, as perceived by the observer, has the Real World Scene modulated for both its Transparency/opacity and also blended with computer generated Digital Virtual image. The present invention enables the ability to per-pixel hide or occlude physical objects in the Real World scene in the observer's direct line-of-sight, 102, and allows those to be replaced with computer generated Digital content in a pixel wise manner. Physical objects can be camouflaged and completely artificial objects, or remote people can be Digitally introduced into the observer's Physical environment where virtual shadows and virtual lighting can be generated on-demand. Therefore our invention allows blending of the Physical and Digital realms for a truly magical visual experience.