Recent development in power electronics and soft computing techniques made it possible to design and implement the sophisticated control strategies of AC motor drives. In this paper the Direct Torque Control (DTC) which is one of the most excellent control strategies of ac motors which give very good steady and dynamic response is simulated. The current research directed towards the improving the performance of this technique whose main drawbacks like the ripples on the torque, on the flux and on the stator current. To reduce the torque ripple, twelve sector DTC is proposed instead of the six sector classical DTC. Also the Luenberger observer is used to estimate the rotor speed and rotor flux. Simulation results are presented to prove the effectiveness of twelve sector DTC. © 2011 IEEE.