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As it stands now you have to pick which you hate the least, tearing or stutter, which isn't an ideal situation.
There is one other known issue that nvidia apparently fixed when they released 300.xx.
Set 'Power Management Mode' to 'Full Performance'. This will run the video card at full power, even if you're just idling in town. It uses more power and generates more heat/noise but it fixes this same stuttering problem.
Like I said, nvidia fixed this some time ago but it's possible it came back. Doesn't hurt to try.
Edited by Artemis#1554 on 3/11/2014 8:19 PM PDT
I already have this setting on Full Performance globally for many years and it doesn't really affect D3's v-sync frame drop. I shouldn't even call it a frame drop because the in-game fps counter will always report 60 fps. What's happening is the game likes to occasionally halve the refresh rate. You can set maximum pre-rendered frames to 8 as a brute force method for now. Doing this requires some extra work from the GPU.
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