A small team may have just cracked one of the big obstacles facing smart glasses

A small startup in California may have just beat billion-dollar startup Magic Leap to the first public demonstration of technology that integrates graphics into the real world with depth, so your eyes can focus on virtual objects at different distances.

Avegant was previously known for Glyph, a pricey pair of headphones that could turn into a personal movie theater thanks to hidden screens in its headband. 

But on Thursday the startup broke into the augmented reality world with a public demonstration and video of its new optics prototype. AR is a technology currently trendy with techies that displays digital objects and other information in the real world. The end-game of AR - or mixed reality, as some in the industry call it - is a pair of consumer smartglasses.

Avegant is claiming what would be a breakthrough in AR optics, one of the core technologies that is limiting AR's market potential at the moment. Avegant says that its prototype displays those images at different focal lengths, more like the real world, which will make AR experiences more compelling and immersive.

That's very similar to what Magic Leap says its still-unreleased and unpublicly demoed headset can do. 

I haven't tried the engineering prototype yet, but the Verge's Nick Statt and expert optics blogger Karl Guttag were able to. "It was a technology capability demonstrator and on that basis it has succeeded," Guttag wrote.

Here's what we know about Avegant's new AR headset: