The paper introduces a new digital watermarking algorithm (NEA) aimed at enhancing data security through embedding secret images into host images using discrete wavelet transforms (DWT) and discrete cosine transforms (DCT). The NEA is compared with Cox's modified embedding algorithm, demonstrating superior performance in terms of lower mean square error (MSE) and better resistance to various attack conditions such as JPG compression and Gaussian noise. Results indicate that the NEA offers improved robustness and imperceptibility, establishing it as a viable alternative to existing watermarking methods.