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Please check to make sure you are running your external display at its native resolution so that you don't have blurriness from scaling the image up or down.
For the local display - what is the native display resolution? if it is high resolution display (say 1920x1080 or higher), then what you are seeing may be a consequence of applications that are not designed for high res displays being "scaled up" by the operating system.
There are known issues with some legacy applications that were not written to be "Hi DPI aware" - these applications assumed they would be run on a certain resolution screen and thus the icons, text layout, etc are all tuned for that resolution (fixed number of pixels). If they were rendered at their native size in pixels, icons and stuff would look tiny; maybe pages wouldn't lay out correctly - so Microsoft offers a "fudge factor" to upscale these old apps... But that doesn't always work and it may make things blurry.
See these article for more information:
Sadly, the really nice hi res display that looks so great in Firefox or Internet Explorer and while editing photos... doesn't look so nice when fixed DPI apps wind up scaled up to a blurry mess.
Here is an article on how to check your DPI settings in Win 8.1:
First, I used native resolution of both displays (1920*1080 for the main and 1680*1050 for the second). Also, I had checked second display with another laptop did not have any problem.
Second, I got your point about automatically scaling up in Windows 8.1. I think it is ridiculous because device manager is not third-part application; it is a Windows built-in application!! Actually, I scaled down it and then got a better image for device manager but other problems (mouse problem, other apps not fitting and so on) occurred that I inclined to ignore it. However, all of this story is about main screen and scaling up or down did not affect second screen.
Thanks for your reply.