A novel hydraulic rotary self-spinning high speed on/off valve is being developed to enable hydraulic systems to be controlled in a more efficient throttle-less manner via pulse-width-modulation (PWM). The valve is designed to operate at a spool frequency of 20Hz to 40Hz. A coarse non-contacting optical encoder is proposed to measure the angular position of the valve spool. Measurement events in the form of encoder count changes are obtained at irregular times and infrequently. An event-based Kalman filter is developed to improve on the resolution and to provide continuous estimation of the spool angular position and velocity. Simulation and experimental results show that the event based Kalman filter can provide accurate continuous estimation for both spool angular position and velocity.