In a new, magnetically controlled reactor (MCR), in which DC pulsing through a special winding controls inductive susceptance, high saturation of the magnetic circuit steel with optimal magnetic and electrical circuit parameters ensures less than 2-3% main harmonic distortion even without special filters. Transformer-like construction ensures reliable operation. MCR's increase power quality through automatic voltage regulation, reduced fluctuation, and smoothing of reactive power surges at 1/2 the cost of thyristor-controlled reactors (TCR's). Damping of voltage-oscillation increases power stability limits, permitting higher voltage transmission. In functional terms, MCR's are powerful low-inertia inductors in which reactive power consumption can be regulated from .01 to 1.0 times rated power, with short-term regulation (up to one minute) up to 2.0 times rated power. Because of this very wide range of control, MCR's significantly reduce no-load power losses. Technically, economically, and in maintenance terms, MCR's compete most handsomely against TCR's, and together with capacitor banks, against SVC's and synchronous condensers.