A Static Compensator (STATCOM) is a viable solution for improving power quality in distribution systems. This technology has resulted in an equipment that is principally different from conventional static Var compensator (SVC). In this paper Direct Power Control of three-phase pulsewidth-modulated inverter without voltage line sensors is applied to a distribution static compensator (DSTATCOM). It is shown that this controller is suitable for mitigation of short term interruption, voltage dips, harmonics and flicker fluctuations.