This article is concerned with the optimal multidirectional power flow architecture in a three-phase power utility network (PUN). The proposed PUN is integrated with distributed energy resources (DER), which provides the demand for active power reducing the dependency of conventional energy generation. The proposed system facilitates dual power flow operation, it not only compensates the reactive power by acting as a compensator but also supplies active power by connecting a dual 2-level voltage source inverter (DT-VSI) at the point of common coupling (PCC). In the DT-VSI-based distribution static compensator (DSTATCOM) configuration, one of the inverters is regarded as the main voltage source inverter (MVSI) supported by DER whereas, the other is considered as an auxiliary voltage source inverter (AVSI) supported by split capacitor DC links. A control algorithm based on Adaptive Least Mean Square (ALMS) is used for the operation of DT-VSI, which results in power quality (PQ) improvements like harmonic reduction, reactive power compensation, voltage balancing at PCC, source side power factor (P.F.) enhancement and reduction in control complexity. Also, this paper provides experimental analysis under PQ issues comparing the DT-VSI with the single two-level VSI (ST-VSI). To check the effectiveness of DT-VSI-based DSTATCOM, observations are carried out by a designed hardware setup using a SPARTAN-6 FPGA controller.