Non-conventional mode of generation of electricity has several advantages over conventional sources of generation. It is eco-friendly, cost effective, damage free, long lasting and more over harmless. Electricity generation through wind energy is considered as socially beneficial and economically feasible for several applications. Domestic and industrial devices use more and more circuits having a non- linear behaviour. They create non-sinusoidal currents causing high harmonic currents in the distribution networks. In the proposed method, a three-phase multifunctional grid-connected inverter interfaced with a wind energy conversion system (WECS) is introduced. This system consists of a permanent magnet synchronous generator (PMSG) based wind turbine, a rectifier and a three-phase voltage source inverter connected to the utility at the point of common coupling. To ensure the multifunctional feature, we propose a direct power control (DPC) which is applied to eliminate line current harmonics, compensate reactive power and feeding wind power into the utility. The simulation results show that the control algorithm of system is effective for eliminating harmonic currents, reactive power compensation and inject the active power available from the PMSG wind turbine into the load and/or grid. Key Words: Wind Energy Conversion System, Double Fed Induction Generator, Self-Excited Induction Generator, Self- Excited Induction Generator, Permanent Magnet Synchronous Generator, Shunt Active Power Filter, Static Compensator, Voltage and Frequency Controller, Photo Voltaic Generator.