A fault detection observer with finite time convergence characteristics(FT_FDO) is proposed and applied to a fault detection isolation system for a dynamic control system. The FT_FDO is a kind of dual state-observer scheme that provides with the state estimates insensitive to a specified fault and the corresponding fault estimate. The state estimates are processed to get the residual that will be logically compared with other residuals to detect and isolate the fault of interest, and the fault estimate may be used for fault compensation. The FDIS employing the FT_FDOs can be considered to be a multiple observer schemes(MOS) in which FT_FDOs are parallelly driven to generate a set of residuals to be compared each other. Due to the finite time convergence characteristics of the FT_FDO, the predetermined detection delay can be considered in the design stage of FDIS so that any fault of interest can be detected and identified in that time. It evidently resolves a well known difficulty of threshold selection owing to the transient responses of the fault detection observers(FDO) employed in FDIS. An FDIS is constructed for instruments(2-sensor, 1-actuator) in an inverted pendulum control system, and simulations are performed to show the performance of the FDIS and fault tolerant control system.