Quadcopter stabilization algorithm

sbright33:
I do not use dt anywhere in my calculations.

The integral and differential elements both require dt, and the psuedocode you posted seemed to use it correctly; isn't that the algorithm being discussed?

loop
  error = setpoint - measured_value
  integral = integral + error*dt
  derivative = (error - previous_error)/dt
  output = Kp*error + Ki*integral + Kd*derivative
  delay(dt)