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Since magnetic core of an inductor is easily saturated and then absorbs extra energy due to saturation, most of inductors are designed with an air core. The inductor requires so many wires to make large inductance and these expensive coils are one of the weak points of the dc reactor type fault current limiter (FCL). To solve this problem, reverse magnetization bias method is introduced. One kind of fault current limiter using dc biased saturated core has been studied in this paper. All exciting saturated cores are ac type. The proposed FCL is a dc reactor type where all the windings carry dc current. The B-H curve of a magnetic circuit shows that less inductance value can be achieved in saturated region and very high value in unsaturated region. The reactance window between the saturated and unsaturated region depends on magnetic material, core size and its biasing condition (T. Hoshino, et. al., 2001). The complete mathematical analysis in different modes of operations of the proposed FCL is given. The simulation results are presented to validate its effectiveness.