Finite detector resolution and limited acceptance require to apply unfolding methods in high energy physics experiments. Information on the detector resolution is usually given by a set of Monte Carlo events. Based on the experience with a widely used unfolding program (RUN) a modified method has been developed.
The first step of the method is a maximum likelihood fit of the Monte Carlo distributions to the measured distribution in one, two or three dimensions; the finite statistic of the Monte Carlo events is taken into account by the use of Barlows method with a new method of solution. A clustering method is used before to combine bins in sparsely populated areas. In the second step a regularization is applied to the solution, which introduces only a small bias. The regularization parameter is determined from the data after a diagonalization and rotation procedure.