A newly developed structural damage monitoring technique is presented. The study focuses on capturing the initiation of multiple damages as they occur in a structure, which is similar to the concept of the fault detection filter. Previously, it has been shown that modified interaction matrix formulation provides a series of input error functions that generate a nonzero residual signal when the system experiences erroneous inputs. Error functions for each individual structural member are developed from the analogy between actuator failure and damage- induced residual force. When each individual error function is monitored, multiple damages as they occur in a structure can be simultaneously detected and isolated. Because the technique does not require frequency-domain measurements, it is readily applicable to online monitoring systems. This real-time technique also accommodates nonlinear breathing cracks and works for any type of excitation. A numerical simulation using a spring-mass system and truss structure successfully demonstrates the proposed method.