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This paper presents the enhancement of voltage sags, harmonic distortion and low power factor using Distribution Static Compensator (D-STATCOM) with LCL Passive Filter in distribution system. The model is based on the Voltage Source Converter (VSC) principle. The D-STATCOM injects a current into the system to mitigate the voltage sags. LCL Passive Filter was then added to D-STATCOM to improve harmonic distortion and low power factor. The simulations were performed using MATLAB SIMULINK version R2007b.