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Voltage sags caused by starting large asynchronous motors, especially in industrial distribution system have huge impacts on system power quality. The paper analyses and proposes an extended application of custom power devices using dynamic voltage restorer for mitigating voltage sags due to the direct-on-line (DOL) starting of asynchronous motors in industrial distribution system. In the paper, different control strategies used for custom power devices are analyzed and an effective method is proposed. A test system is simulated in Matlab/Simulink with different DVR configurations that proves the effectiveness and robustness of the proposed control strategy with dynamic voltage restorer for voltage sag mitigation. The results show that voltage sags are totally compensated.