The development of non-linear loads at consumers has significantly impacted power supply systems. Since, the poor power quality has been found in the three-phase distribution system due to unbalanced loads, harmonic current, undesired voltage regulation, and extreme reactive power demand. To overcome this issue, Distributed STATicCOMpensator (DSTATCOM) is implemented. DSTATCOM is a shunt-connected Voltage Source Converter (VSC) that has been utilized in distribution networks to balance the bus voltage in terms of enhancing reactive power control and power factor. DSTATCOM can provide both rapid and continuous capacitive and inductive mode compensation. A rectified resistive and inductive load eliminates current harmonics in a three-phase power supply. The synchronous fundamental DQ frame is a time-domain approach developed from three-phase system space vector transformations has been designed using MATLAB/Simulink. The DQ theory is used to produce the reference signal for the Pulse Width Modulation (PWM) generator. In addition, a traditional Proportional Integral Derivative (PID) controller is designed and compared with proposed soft computing approaches such as Fuzzy-PID and Artificial Neural Network (ANN-PID) and compared accurate reference current determination for Direct Current (DC) bus through DC link. An Analytical explores the proposed control strategies given to establish superior outcomes. Finally, total harmonic distortion analysis should be taken for performance analysis of the proposed system with IEEE standards.