This paper presents a new control scheme for a DVR (dynamic voltage restorer) system consisting of series voltage source PWM converters. To control the negative sequence components of the source, it is necessary to detect the negative sequence components. Generally, a filtering process is used which has some undesirable effects. This paper suggests a new method for separating positive and negative sequences components. This control system is designed using differential controllers and digital filters. The positive and negative sequences are extracted and controlled individually. The performance of the presented controller and scheme are confirmed through simulation and actual experiment with a 2.5 kVA prototype DVR system.