By adding Buck-type AC/AC converter to conventional power capacitor, dynamic capacitor (D-CAP) can be formed to compensate variable rather than fixed reactive power. However, some nonlinear distortion factors, namely grid harmonic voltage, voltage drop of switches and dead-time, would cause harmonics in its compensation current, meanwhile, its capacitance may interact with the grid inductance to cause series resonance. Both nonlinear distortion factors and series resonance would distort the waveform of its compensation current and make the grid current failed to meet the power quality standard IEEE Std.519. This paper focuses on the output current distortion of Buck-type D-CAP in reactive power compensation. For harmonic distortion, through establishing the equivalent circuit of Buck-type D-CAP, the generation of low-order harmonic current is investigated under three nonlinear factors. A current reshaping method to simultaneously diminish the harmonics caused by the three nonlinear distortion factors is thus adopted, which is a feedback control of output current harmonics. Then for series resonance, based on the block diagram of Buck-type D-CAP within the grid, transfer function from grid voltage to the output current is deduced and the corresponding Bode diagram is depicted. An active damping method is therefore suggested to shrink the low-order series resonance peak, by detecting power capacitor's voltage for feedback control. Finally, a combined control, reactive current reshaping with series resonance damping is proposed in this paper for three-phase Buck-type D-CAP. A wide variety of experimental results from a 33kVar/220V laboratory prototype are provided to demonstrate the validity of the combined control.