This work presents a fuzzy based methodology for distribution system feeder reconfiguration considering DSTATCOM with an objective of minimizing real power loss and operating cost. Installation costs of DSTATCOM devices and the cost of system operation, namely, energy loss cost due to both reconfiguration and DSTATCOM placement, are combined to form the objective function to be minimized. The distribution system tie switches, DSTATCOM location and size have been optimally determined to obtain an appropriate operational condition. In the proposed approach, the fuzzy membership function of loss sensitivity is used for the selection of weak nodes in the power system for the placement of DSTATCOM and the optimal parameter settings of the DFACTS device along with optimal selection of tie switches in reconfiguration process are governed by genetic algorithm (GA). Simulation results on IEEE 33-bus and IEEE 69-bus test systems concluded that the combinatorial method using DSTATCOM and reconfiguration is preferable to reduce power losses to 34.44% for 33-bus system and to 45.43% for 69-bus system