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This paper presents a network-integrated adaptive protection and control of electricity distribution systems connected with dispersed or distributed generations (DGs). A focus of this paper is to demonstrate the effective use of state-of-the-art digital signal processing (DSP) technology for real-time determination of correct protection and control operations, and to illustrate significance of modern computer communication technology applied for real-time monitoring of distribution system states and transmitting of data and commands. This paper presents the design of a new two-layer network monitoring architecture. This architecture is fault tolerant and is specially designed for monitoring the operating states of the distribution network with a large number of feeder nodes and connected with DGs. Typical adaptive protection and control of the distribution system with the presence of DGs are illustrated.