Kondala:
DTMF detection can be done in software on a DSP type processor. However it is not generally practical on an 8051 type processor. You should instead use one of the various DTMF detector chips that are in the market. If you search the message forum here at 8052.com you can find the part numbers of several of these. Also if your product also has to generate DTMF tones there are available chips called DTMF Transceivers that do both functions in one chip.

Michael Karas