Modern industrial processes are based on a large amount of electronic devices such as programmable logic controllers and adjustable speed drives. Unfortunately, electronic devices are sensitive to disturbances and thus industrial loads become less tolerant to power quality problems such as voltage sags, voltage swells and harmonics. The Dynamic Voltage Restorer (DVR) has become popular as a cost effective solution for the protection of sensitive loads from voltage sags and swells. This study deals with modeling and simulation of a Dynamic Voltage Restore (DVR) for mitigation of voltage sags and voltage swells. The control of the compensation voltages in DVR based on d-q-o algorithm is discussed. The controller in d-q-o coordinates has better performance than conventional controllers. The controlled variables in d-q-o coordinates are then inversely transformed to the original voltages which produced reference voltages to a DVR. The DVR restores constant load voltage and voltage wave form by injecting an appropriate voltage. Effectiveness of proposed technique is investigated through computer simulation by using Matlab/Simulnk software. The simulation results have shown validation of the control system.