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A technique using discrete wavelet transform (DWT) in order to discriminate among inrush current, internal fault, and external fault has been proposed. Daubechies4 (db4) is employed as mother wavelet in order to decompose low frequency components from fault signals. A ratio between per unit differential current and per unit time is calculated and performed as comparison indicator. The results obtained from the proposed technique have good accuracy to discriminating fault in the considered system.