The proposed work described a new Multiple Delay Signal Cancellation (MDSC) control technique for power quality improvement including harmonic cancellation and power factor improvement for a three-phase self-excited induction generator (SEIG)-Distributed Static Compensator (DSTATCOM) based system. A detailed design and stability analysis is being carried out. The MDSC possesses multiple variable length delay signals so as to extract the positive and the negative sequence components (PSC and NSC) so as to generate sinusoidal reference currents for the source. An extensive simulation analysis is being executed to illustrate the controller's efficiency using MATLAB/SIMULINK. A hardware prototype is being developed in the laboratory including SEIG and DSTATCOM. The hardware results prove the effectiveness of the proposed control filter.