In this paper THD (Total Harmonic Distortion) is analysed and compared by using UPFC in a multi-line transmission system of 500 KV having 5-buses in two different arrangements. The UPFC converters are arranged as a Diode Clamped multilevel Converter (DCMLC) that leads to the cost reduction as compared with other multi-level converters. The comparison has been done by both series zig-zag/2Y-2Δ and series zig-zag/4Y transformer configuration for 48-pulses GTO based diode clamped converter. The THD is reduced to 42.59% and 58.82% of input waveform at bus B2 by using series zig-zag/4Y transformer configuration. This transformer converter configuration also reduces the difficulty of designing the transformer winding ratio. For calculation of THD, FFT analysis is carried out using MATLAB.