The primary aim of this work is to establish the effectiveness of microwave plasma discharges to improve combustor flame dynamics and stability through minimizing heat release fluctuations. A continuous, volumetric, direct coupled, non-equilibrium, atmospheric microwave plasma discharge was applied to a swirl stabilized premixed methane-air flame to minimize combustion instabilities. Proper Orthogonal Decomposition (POD) is used to post-process data and extract information on flame dynamics that are usually lost through classical statistical approaches. POD analysis carried out on OH planar laser-induced fluorescence (PLIF) images reveal that even at coupled plasma powers corresponding to less than 5% of the thermal power output, significant improvement in mean energy content of flames (~23%) was observed. The corresponding decrease in heat release fluctuations resulted in improved combustor flame dynamics and flame stability, which was found to be in good agreement with acoustic pressure measurements. In the presence of plasma discharge, an effective decoupling between the flame oscillations and the fluid unsteadiness was established due to the differences in flame stabilization mechanisms resulting in up to 47% reduction in RMS pressure fluctuations. Thus, effective fluid-acoustic decoupling in addition to the accelerated combustion chemistry due to the non-thermal effects of plasma led to significantly improved combustor dynamics namely, decreased heat release and pressure fluctuations.