The fast developments in power electronics technology have made it possible to mitigate voltage disturbances in power system. Among the voltage disturbances challenges in the industry, voltage sags are considered the most critical problem to sensitive loads. The Dynamic Voltage Restorer (DVR) is mainly used in a utility grid to protect the sensitive loads from power quality problems, such as voltage sags and swells. Even though the effectiveness of the DVR can wane under unbalanced grid voltage conditions, it is recognized to be the best effective solution to overcome this problem. The primary advantage of the DVR is keeping the users always on-line with high quality constant voltage maintaining the continuity of production. In this paper, the usefulness of including DVR in distribution system for the purpose of voltage sag and swell mitigation is described. This paper also describes the DVR operation strategies and control. The DVR operation with the distribution networks is found very efficient for detecting and clearing any power quality disturbances in distribution system. Results of simulation using MATLAB/Simulink are demonstrated to prove the usefulness of this DVR design and operation to enhance the power system quality.