One of the major power quality problems in distribution systems are voltage sags. This paper deals with a dynamic voltage restorer (DVR) as one of the different solutions to compensate these sags and protect sensitive loads. However, the quality of DVR output voltage itself, such as THD, is important. So, in this paper a configuration of DVR based on flying capacitor multicell (FCM) converter is proposed. The main properties of FCM converter, which causes increase in the number of output voltage levels, are transformer-less operation and natural self-balancing of flying capacitors voltages. The proposed DVR consists of a set of series converter and shunt rectifier connected back-toback. To guarantee the proper operation of shunt rectifier and maintaining the dc link voltage at the desired value, which results in suitable performance of DVR, the DVR is characterized by installing the series converter on the sourceside and the shunt rectifier on the load-side. Also, the pre-sag compensation strategy and the proposed voltage sag detection and DVR reference voltages determination methods based on synchronous reference frame (SRF) are adopted as the control system. The proposed DVR is simulated using PSCAD/EMTDC software and simulation results are presented to validate its effectiveness.