Nowadays, power quality under the excessive implementation of power electronics devices is quite challenging issue. The compensation of non-sinusoidal; reactive and harmonic; components is the main role for power quality devices which highly depend on the robustness of the control system. Some common control systems are implemented using DQ theory. This paper proposes a new version of DQ control technique to control dynamic voltage restorer under severe transient voltage conditions. The power system network with the new DQ control technique is studied and analyzed under different scenarios to compensate for severe balanced and unbalanced voltage sags and swells. This new scheme is based on extraction of positive sequence components to implement the control algorithm. A mathematical model of the DVR, hysteresis voltage control, converter controller model, new DQ scheme with complete system equations are carried out and verified using Simulink / MATLAB. The proposed system is validated experimentally using DSpace 1104 based laboratory system. The obtained results of the proposed compensation algorithm are compared with the results obtained from the traditional DQ method. Simulation and experimental results are correlated and show effectiveness of the proposed DQ control scheme.