Network streams have become ubiquitous in recent years because of many dynamic applications. Such streams may show localized regions of activity and evolution because of anomalous events. This paper will present methods for dynamically determining anomalous hot spots from network streams. These are localized regions of sudden activity or change in the underlying network. We will design a localized principal component analysis algorithm, which can continuously maintain the information about the changes in the different neighborhoods of the network. We will use a fast incremental eigenvector update algorithm based on von Mises iterations in a lazy way in order to efficiently maintain local correlation information. This is used to discover local change hotspots in dynamic streams. We will finally present an experimental study to demonstrate the effectiveness and efficiency of our approach. © 2013 IEEE.