This paper discusses operating characteristics of a permanent magnet synchronous motor (PMSM) drive system based on direct torque control (DTC). In this system, the whole control system works in a rotating reference frame that is synchronized with the stator flux linkage vector (called M-T frame). The stator flux estimation is also based on a PMSM model in the M-T frame, and thus, this is expected to improve the accuracy of flux estimation in low speed region. In addition, maximum torque per ampere (MTPA) and flux-weakening controls are applied for wide-speed-range operation. A novel MTPA model is used for the reference flux calculation. Both simulation and experimental results show the effectiveness of the DTC in the M-T frame.