The problem of borehole azimuth determination by means of gyro inclinometer which operates in the gyrocompassing mode but don't measure the axial angular rate component is considered. Basing on the existence of two solutions for azimuth which differ in accuracy the optimal algorithm is derived, algorithm performance is examined and the efficiency of new algorithm versus conventional one is demonstrated. The problem is also solved based on the general approach for the attitude determination from 2 vector observations. In the bounds of this approach the existence of two solutions for the unknown DCM element is proven and the equivalence of these solutions to two ones for the azimuth is shown. The universal optimal DCM attitude algorithm is obtained which can be used in the vertical boreholes too. In conclusion of the paper gyro inclinometer mockup test results which verify the advantage of new algorithm are presented.