★ Root NOT needed ★
Proxy that can operate with proxy authentications.
Android OS has just proxy with no authentication.
So this app can help you with your corporate/university/school network environment.

Supports digest, windows (ntlm), basic authentication. HTTP,HTTPS,SOCKS4a,SOCKS5 type of proxies.
Drony will start if wifi appears that has proxy set on same port that is used in Drony to listen.
Drony will stop when that wifi is no longer active.
-can be used with adblockplus
-can be used with local SOCKS proxies, builtin shadowsocks tunnel
https://github.com/SuppSandroB/sandrop/wiki/DronyWithOrbot
-support for multiple network configurations
-pac/wpad proxy script support http://code.google.com/p/sandrop/wiki/HowToUseDronyWithScriptProxy
-local networks name resolver http://code.google.com/p/android/issues/detail?id=8030
- tab FILTER where you can see apps that are making requests and perform filter actions
- actions deny, allow, direct (no proxy), local proxy chain
- default filter behaviour : deny all, allow all, direct all, local proxy chain all
- filter by network or for all networks
- filter can be on client ip, application, hostname part, port, method
- tab CONNECTIONS where you can see which apps makes traffic, details about all connections

FAQ:

https://github.com/SuppSandroB/sandrop/wiki/Drony-FAQ

If you need more options, features check SandroProxy. It's more a developer tool for intercepting traffic.
https://market.android.com/details?id=org.sandroproxy

How to connect to another proxy example:
http://code.google.com/p/sandrop/wiki/HowToUseDronyWithOtherProxy

Beta testing group:
https://groups.google.com/d/forum/drony-beta-test

XDA thread:
http://forum.xda-developers.com/showthread.php?t=2320008

Admin settings wizard:
http://code.google.com/p/sandrop/wiki/DronySettingsWizard

For dns Drony is using two open source programs:
dnscrypt-proxy: https://github.com/SuppSandroB/dnscrypt-proxy/tree/android_jni
pdnsd : https://github.com/SuppSandroB/shadowsocks-android
shadowsocks : https://github.com/SuppSandroB/shadowsocks-android

This program is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.