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, such as THD, is important. This paper present a new configuration of DVR based on stacked multicell (SM) converter. The main properties of SM converter, which causes increase in the number of output voltage levels, are transformer-less operation and natural self-balancing of flying capacitors voltages. To avoid any exchange of active power in compensation process, the proposed DVR is controlled by energy minimized compensation strategy which is explained in details for balanced and unbalanced voltage sags. Also, the proposed voltage sag detection method as well as proposed DVR reference voltage determination method based on synchronous reference frame (SRF) is adopted as the control system. The proposed DVR is simulated using PSCAD/EMTDC software and simulation results are presented to validate its effectiveness.