This article presents a new modified topology to cover both fault current limiter and dynamic voltage restorer functions in utilities. A new control pattern is proposed to minimize power loss during short circuits in downstream and compensate for voltage fluctuation effects on the grid. Power source will not experience any excess current conditions during fault current mode, which is a novelty of the proposed technique. Analysis is carried out for grid voltage unbalances and short-circuit faults and was verified through simulations. Finally, a scaled-down prototype is built to validate the feasibility and effectiveness of the proposed technique.