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Some changes are required to improve the characteristics of power system to implement the developing smart grid technology. For distribution system, DC mode is a very good complementation of AC techniques. The control strategies and dynamic performance of DC distribution system are studied to investigate the feasibility of the DC distribution mode. A novel prototype of distribution system is provided. Three different control strategies are applied in different converters for the demand of corresponding functions. The simulation results show the advantages of DC distribution system: the converters can provide accurate active power transaction and balance reactive power in the stable situation, while provide the ability to mitigate the voltage sags during the faults in AC distribution system and improve the power quality in transient situation.