The performance of electrical systems is becoming more affected by the increased voltage drop, power loss, and power quality problems. These issues can be drastically minimized by the incorporation of compensators in the distribution network. Distribution Static Compensator (DSTATCOM), like similar reactive power compensation systems, is a shunt connected unit of the Distribution Flexible AC Transmission System (DFACTS). DSTATCOM has been used for power system operation versatility and control in recent years, specifically to provide control for reactive power flow, power loss mitigation, power quality enhancement, and current and voltage control. Many researchers are presently carrying out studies on the optimal use of DSTATCOM in distribution networks. This paper presents a detailed summary of the recent approaches used by various authors to evaluate and determine the optimal use of DSTATCOM in distribution networks in order to enhance power quality. The methods and platforms used and the various research objectives are clearly outlined and discussed in detail. An analysis of the reviewed works is provided as well as suggestions for future research.