This paper presents detailed analysis of load voltage compensation for dynamic voltage restorer (DVR) that used for enhancing power quality. DVR is a custom power device used to correct voltage sag by injecting voltage as well as power into power distribution system. A method of determining the exact amount of voltage injection required to correct a specific voltage reduction with minimum power injection is described. Analytical expressions for both magnitude and angle of the injected voltage are also derived. It has been shown that a voltage reduction and power factor should be analyzed before compensating the voltage. Simulation results show the performance of the proposed analysis though Matlab/simulink tool.