The quantum mechanical ground state of electrons is described by Density Functional Theory, which leads to large minimization problems. An efficient minimization method uses a self-consistent field (SCF) solution of large eigenvalue problems. The iterative Davidson algorithm is often used, and we propose a new algorithm of this kind which is well suited for the SCF method, since the accuracy of the eigensolution is gradually improved along with the outer SCF-iterations. Best efficiency is obtained for small-block-size iterations, and the algorithm is highly memory efficient. The implementation works well on both serial and parallel computers, and good scalability of the algorithm is obtained. (C) 2001 IMACS. Published by Elsevier Science B.V. All rights reserved.