The compass is a particularly important device on the ship. Using the compass, the operator can determine the correct direction of the vessel, which contributes to fuel economy and safety. The compass was first invented in China during the Song Dynasty to indicate the direction of movement in the deserts. Currently, different types of compasses are used for different purposes: electric, satellite, magnetic compass, etc. Modern multifunctional compasses are produced with high reliability by manufacturers from Japan, Russia, the USA, etc. Despite the presence of a significantly large selection of compasses, existing devices are not suitable for small vessels, their price in many cases is not affordable. In this regard, research and manufacture of digital magnetic compass (DMC), which can be connected to other onboard systems, allows the solution of economic difficulties. In the process of studying the design of digital magnetic compass, a difficulty arose that poses the problem of filtering noise for a digital magnetic compass. In a pilot study, the authors used a Kalman filter to filter noise information for a digital magnetic compass. In the process of testing, the authors found that using the Kalman filter to filter out information noise for a compass was very effective. The article describes the results of research, manufacturing the DMC, and the use of the Kalman filter to filtering the noisy information from this compass. The results of practical tests show that the use of the Kalman algorithm provides significantly better accuracy of filtration. The manufactured DMC (with the Kalman filter) was certificated and its readiness was shown for operation under real conditions.