A method of precisely controlling the position of a hydraulic actuator using an on/off valve is developed. Since valves exhibit little power loss when they are fully open or fully closed, the proposed system is more efficient than throttling valve control and can achieve flow variation without the expense or bulk of a variable displacement pump. Mating a pulse-width-modulated (PWMed) on/off valve with a fixed displacement pump and a smoothing accumulator creates a software enabled variable displacement pump. A drawback of using digital valve control for hydraulic systems is that the relatively low speed of the currently available switching valves results in a significant ripple in the pressure and flow rate. We propose a solution to this problem by using a throttling valve to shield the actuator from the ripple in the output. This creates an effective load sensing system with the throttling valve used only to provide a small known pressure drop between the supply and the load. This approach is significantly more efficient than the conventional technique of using throttling to vary the full flow. This paper presents an averaged model of the system, a nonlinear controller to achieve position control of an actuator and a simulation based study of the effectiveness of the controller.