This paper presents a modified id-iq based control algorithm for time varying active and reactive power control and load harmonics compensation by DSTATCOM under load fluctuations. The proposed scheme of control algorithm has been introduced for enhancing steady-state performances in addition to useful elimination of power quality disturbances. Employing a preexisting D-STATCOM to attain these added control purposes can advantage system handling operators to maximize complete response of the system. For regulating the time varying active and reactive power control, an extra current control loop system is provided and consequently comprised in the control block. To validate its application, a 200-V electricity feeder with a 3-phase rectifier as a non-linear load was simulated. Results obtained proved that addition of an extra control loop of current component of reactive power can regulate active as well as reactive power drawn on controlled feeder completely under the fluctuations of load.