In this paper, a three-phase three-wire Distribution STATic COMpensator (DSTATCOM) which is fed by Photovoltaic (PV) array or battery operated DC-DC boost converter is proposed for power quality improvement in the distribution system. The proposed DSTATCOM consists of a three-leg Voltage Source Converter (VSC) with a DC bus capacitor. The PV array or battery operated boost converter is proposed to maintain the DC link voltage of the DC bus capacitor for continuous compensation for the load. The control of DSTATCOM is achieved by using IcosΦ controlling algorithm which is used to generate the reference currents. The switching of VSC will occur by comparing the source current with the reference current using Hysteresis based Pulse Width Modulation (PWM) current controller. The performance of the DSTATCOM is validated using MATLAB software with its simulink and Power System Blockset (PSB) toolboxes.