A Faraday-effect-based radial-interferometer-polarimeter diagnostic has been developed to explore fast magnetic dynamics in high-performance DIII-D plasmas. The instrument measures radial magnetic field perturbations using three chords positioned near the magnetic axis. Newly developed solid-state sources operating at 650 GHz provide phase noise down to 0.01°/kHz and tunable bandwidth up to 10 MHz. Various systematic errors which can contaminate the polarimetric measurement have been investigated in detail. Distortion of circular polarization due to non-ideal optical components is calibrated using a rotating quarter wave plate technique. The impact of perpendicular magnetic field, i.e., the Cotton-Mouton effect, is evaluated. The error due to non-collinearity of probe beams is minimized to less than 0.5° for electron density up to 7 × 1019 m−3 by alignment optimization. Optical feedback, due to multiple reflections induced by the double-pass configuration, is identified and reduced. Coherent and broadband high-frequency magnetic fluctuations for DIII-D H-mode plasmas are observed.