A method for dynamically optimizing the memory use in a digital recording device. The disclosed method includes recording a plurality of digital files collected by said digital recording device on a recording medium and assigning each file of said plurality of recorded digital files a priority ranking of high, medium or low based on at least one predetermined criteria. The method also includes recording additional digital files on the recording medium and compressing the files assigned a low priority ranking when the recording medium reaches a first predetermined threshold of the recording medium's total storage capacity. The method further includes compressing the files assigned a medium priority ranking when the recording medium reaches a predetermined threshold in the recording medium's total storage capacity and deleting files designated as low priority files when the recording medium reaches a predetermined threshold in the recording medium's total storage capacity.