In this paper, an improved dynamic state estimation (DSE) based protection (DSEBP) scheme is proposed for transmission lines in MMC-HVDC grids. Firstly, a dynamic model of the protection zone (DC line of interest) is constructed using differential and algebraic equations. The impact of frequency dependent line parameters is mitigated through the utilization of the “line mode” transmission line model. Then, a novel Runge-Kutta (RK) discretization scheme is proposed to consider the dynamics of the control variables during electromagnetic transients, yielding reduced discretization error as compared to the conventional RK scheme. Finally, the batch mode regression framework based DSE is developed to formulate the protection logic considering errors of both measurements and historical estimates. Numerical experiments have shown that the proposed DSEBP scheme can dependably detect and trip internal faults, and securely ignore the external faults. The proposed scheme achieves improved reliability and operational speed as compared with the existing DSEBP schemes. The proposed scheme only requires a typical sampling rate of 10k samples per second, has the robustness to measurement noises, and the calculation burden is low enough for practical implementations.