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Direct torque control (DTC) is known to produce fast response and robust control in ac adjustable-speed drives. However, in the steady-state operation, notable torque, flux, and current pulsations occur. A new, direct torque and flux control strategy based on variable-structure control and space-vector pulsewidth modulation is proposed for induction motor sensorless drives. The DTC transient merits and robustness are preserved and the steady-state behavior is improved by reducing the torque and flux pulsations. A sliding-mode observer using a dual reference frame motor model is introduced and tested. Simulations and comparative experimental results with the proposed control scheme, versus classic DTC, are presented. Very-low-speed sensorless operation (3 r/min) is demonstrated.