This paper presents a novel dynamic voltage restorer (DVR) capable of handling deep sags including outage on a low voltage distribution system. The DVR recovers sags up to 10% of nominal voltage; otherwise, it will operate as an uninterruptible power supply (UPS). A transformer is connected in series with the load when restoring sags, and is reconfigured into parallel connection using switches when handling outages. The controller uses a Fuzzy Logic with 3 inputs to maintain the load voltage through d-q transformation. Preliminary results from laboratory tests are also presented in this paper.