The Pulse shape discrimination (PSD) technique for single crystal CVD diamond detector (SDD) was applied to the real-time thermal neutron measurement during the 3rd campaign of Deuterium-Deuterium (D-D) plasma experiment in the Large Helical Device (LHD). The PSD method is based upon the different shape of electrical pulses produced in diamond by gamma-ray (triangular-shaped pulse) and energetic ions (rectangular-shaped pulse), respectively. An improved PSD was developed which makes use of the full width at half maximum (FWHM) and the full width at 2/3 of the peak height (FW2/3 PH). These two parameters reflect the difference in the pulse shape produced by gamma-rays and energetic ions. The performance of this improved PSD technique was first tested irradiating the SDD by gamma-rays from 60Co and alphas from 241Am radiation sources, respectively. Then, using a 6LiF thermal neutron converter, a successful discrimination between gamma-rays and alpha particles and tritons generated by the 6Li(n,α)3H reaction induced by neutrons from 252Cf spontaneous fission neutron source was achieved. Thanks to this PSD processing technique, the thermal neutron detection efficiency increased about 1.7 times compared to previous measurements performed without the PSD technique. The real-time thermal neutron measurement by SDD with this enhanced PSD processing was also used during D-D plasma discharges in the Large Helical Device (LHD). It was found that both the time integrated counts and the time evolution count rate measured by the SDD reproduced well that of the fission chamber used as official LHD neutron monitor. The capability of the SDD detector using the PSD technique of precise real-time thermal neutron measurement in LHD was demonstrated.