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Surveillance control and reporting (SCR) system for air threats play an important role in the defense of a country. SCR system corresponds to air and ground situation management/processing along with information fusion, communication, coordination, simulation and other critical defense oriented tasks. Threat Evaluation and Weapon Assignment (TEWA) sits at the core of SCR system. In such a system, maximal or near maximal utilization of constrained resources is of extreme importance. Manual TEWA systems cannot provide optimality because of different limitations e.g. surface to air missile (SAM) can fire from a distance of 5Km, but manual TEWA systems are constrained by human vision range and other constraints. Current TEWA systems usually work on target-by-target basis using some type of greedy algorithm thus affecting the optimality of the solution and failing in multi-target scenario. his paper relates to a novel two-staged flexible dynamic decision support based optimal threat evaluation and weapon assignment algorithm for multi-target air-borne threats.