This manuscript is aimed to differentiate the role of DC capacitor in voltage source inverter based active power line conditioning (APLC) system. To achieve this objective, a single six-pulse converter and three-phase parallel converters with different firing angles have been chosen as the load. A novel control circuit based on instantaneous p-q theory has been proposed to determine the compensation current associated with three-phase parallel converters. It has been observed that APLC system having separate DC source is able to deliver all the components of power other than the positive sequence fundamental average power to achieve purely balanced sinusoidal source currents in phase with respective source voltages and thereby minimizes the power delivered by the ac source. One may also note that elimination of harmonics, unbalance and asymmetry in source currents will eventually eliminate disturbances in terminal voltages and hence the use of series compensator could be avoided.