Methods and apparatus of managing decoded picture buffer for a video coding system are disclosed for a system using an Inter prediction mode and an Intra Block Copy mode. According to one method, a current-picture-usage flag in a picture or slice level is determined. If the current-picture-usage flag indicates that the current picture is not allowed to be used as the reference picture for the current picture, only one picture buffer is allocated in a DPB (decoded picture buffer) for the current picture and a reconstructed current picture after in-loop filtering is stored in the picture buffer in the DPB. According to another method, the system allocates only one picture buffer in the DPB for both the Inter prediction mode and the Intra Block Copy mode of the current picture if all of one or more in-loop filters are disabled for the entire part of the current picture.