This study examines the performance of a modular multi level converter with a half bridge sub-module (HBSM)-based seven level distribution static synchronous compensator (MMC-DSTATCOM) in low voltage micro grids under unbalanced and flawed system conditions. For MMC- DSTATCOM, the phase angle control algorithm served as the outside control and the phase shift carrier PWM served as the interior control with capacitor balanced control. The effectiveness of MMC-DSTATCOM is investigated in MATLAB/Simulink for a number of simulations, including reactive power compensation, unbalanced, and defective grid scenarios.