Nowadays power quality issues  are one of the major problems in transmission and distribution system in electrical networks. This paper presents Neutral Point Clamped Inverter (NPCI) based Dynamic Voltage Restorer (DVR) for three phase system. DVR is one of the reliable solutions to control the quality of voltage at sensitive loads, and it  is  a  series  connected converter  which is  used  to  compensate  voltage related problems such as voltage sag, voltage swell and voltage interruption etc., the  NPCI is used  with  single  dc  supply  to  obtain  required output  levels. The NPCI is used to produce output with low distortion factor, with the goal that NPCI rating is decreasing when inject the supply voltage in series. The size of series connected devices depends upon the injecting voltage, if injecting voltage is minimum then the size is  reduced, automatically DVR rating will be reduced. The simulation results for proposed topology are presented in this report through MATLAB/SIMULINK, by using DVR method reducing THD level.