Power electronic transformer (PET) composed of modular dual active bridge (DAB) blocks has a promising future in ac-dc hybrid distribution network because of its energy routing ability. The key element that restrains the development of PET is the vulnerability of power electronic devices during faults, especially dc faults. DC faults (mostly line faults) have very short transient process and no obvious fundamental frequency, which means fault location is difficult to be realized for dc lines in distribution network. Considering that fault location plays an important role in realizing fast fault clearance and recovery, this paper analyzed fault characteristics of dc line faults with respect to the basic structure of modular DAB block and proposed a two-terminal fault location method based on transient voltages measured in dc line boundaries. To evaluate the validity of proposed method, numerical simulations with different fault conditions were implemented in PSCAD/EMTDC. The simulation results indicate that the proposed fault location method located the faulted point quickly and correctly.