This paper discusses the theoretical development of a high-performance active dynamometer system using a permanent magnet brushless DC motor. The proposed dynamometer system consists of a motor under test (MUT) which includes the motor and its associated drive system, rigidly coupled to a dynamometer actuator which is assumed to be a permanent magnet brushless DC motor. The dynamometer actuator is computer-controlled to present a user-definable, active dynamic load to the MUT. Assuming exact model knowledge and full-state measurements, a voltage level control algorithm is proposed for the dynamometer actuator which provides a globally exponentially stable (GES) torque trajectory tracking result for the dynamometer system. This result is obtained using two recently developed nonlinear control techniques called integrator backstepping and nonlinear damping. The theoretical performance of the proposed dynamometer controller is verified using computer simulation. Work towards the experimental implementation of a similar dynamometer system is currently being conducted at the US Air Force's Wright Laboratory in support of the More Electric Aircraft Initiative.