In this paper a hybrid topology for Distribution Static Compensator (DSTATCOM) applications is proposed. The compensating capability of DSTATCOM mostly depends on the capacity of the DC link voltage. The proposed topology enables DSTATCOM to have a reduced DC link voltage without any compromise on the performance. This proposed topology uses a series capacitor along with the interfacing inductor. With the reduction in DC link voltage the topology also reduces the average switching frequency of the IGBT switches of the DSTATCOM. Consequently, the switching losses in the inverter comes down. Detailed design aspects of the series capacitor have been discussed in the paper. A simulation study of the proposed topology has been carried out using PSCAD simulator and the results are presented. © 2011 IEEE.