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This paper deals with the design, analysis, modeling and control of Fuel Cell based Distributed Generation System. This includes the modeling of Proton Electrolyte Membrane Fuel Cell and the Power Conditioning Unit interfacing the Fuel Cell to the Utility Grid with proper power flow control. The output of the Fuel Cell Stack is connected to the DC side of the Voltage Source Inverter for interfacing to the Grid. The active power transfer is based on the phase angle between DC-AC converter output voltage and Grid voltage and reactive power management is based on magnitude of these voltages. The entire system is modeled in MATLAB/Simulink environment and simulations carried out to verify the operation and the control principle. Various simulation results are presented for the proposed Fuel Cell Grid interfaced system.