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This paper presents the systematic procedure of the modeling and simulation of a Distribution STATCOM (D-STATCOM) for power quality problems, voltage sag and swell based on Sinusoidal Pulse Width Modulation (SPWM) technique. Power quality is an occurrence manifested as a nonstandard voltage, current or frequency that results in a failure of end use equipments. The major problems dealt here is the voltage sag and swell. To solve this problem, custom power devices are used. One of those devices is the Distribution STATCOM (D-STATCOM), which is the most efficient and effective modern custom power device used in power distribution networks. D-STATCOM injects a current in to the system to correct the voltage sag and swell. The control of the Voltage Source Converter (VSC) is done with the help of SPWM. The proposed D-STATCOM is modeled and simulated using MATLAB/SIMULINK software.