In this article, the authors present theoretical background and practical procedures for linking displacement sensing and estimation to nanoscale alignment. The authors,discuss the application of nanoscale displacement sensing and estimation (nDSE)-based overlay metrology tool. The authors propose a new look,at what constitutes displacement and alignment. From there, the authors develop several frameworks to bridge these two concepts based on a set of new pseudodisplacement concepts and on the careful selection of references. Direct displacement-measurement-based alignment (DDMA) is the first method the authors have used to generate reliable alignment results. The authors achieved sub-100-nm (down to 21 nm) alignment accuracy. Indirect displacement-measurement-based alignment (IDMA) is the most accurate method in theory. IDMA truly utilizes nDSE to achieve precision coplacement between different layers and processes. IDMA and DDMA, along with a group of other nDSE-based algorithms/procedures, are vibration tolerant, making them ideal as overlay alignment tools for nanoimprint lithography. (c) 2006 American Vacuum Society.