Multi-Microgrid (MMG) is a combination of two or more microgrids (MGs), based on renewable energy sources, integrated at a common point of coupling. However, due to the fluctuating resources and also with different variable loads, it is difficult to maintain a balance between sources and loads, which consequently leads to power quality problems such as voltage and current distortions. In this regard, a novel multi-function device like Interline Unified Power Quality Conditioner (IUPQC) is proposed to mitigate these power quality issues. IUPQC consists of series and shunt active power filter (APF) linked through a common DC link capacitor. However, unlike Unified Power Quality Conditioner (UPQC), in IUPQC, the APFs are individually connected to two independent distribution feeders. The shunt APF mitigates current imperfections of feeder 1 and regulates the DC voltage of the DC link capacitor whereas the series APF mitigates voltage imperfections of feeder 2. This paper presents the incorporation of IUPQC between two MGs (feeders) in MMG, and design of its controller to compensate and minimize the voltage and current harmonics due to the source and load disturbances.