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Frequency is an important operating parameter for the protection, control, and stability of a power system. Thus, it must be maintained very close to its nominal frequency. Due to the sudden change in generation and loads or faults in a power system, however, frequency deviates from its nominal value. An accurate monitoring of the power frequency is essential for optimum operation and prevention of wide area blackout. Most conventional frequency estimation schemes are based on the DFT filter. In these schemes, the gain error could cause defects when the frequency deviates from the nominal value. We present an advanced frequency estimation technique using gain compensation to enhance the DFT filter-based technique. The proposed technique can reduce the gain error caused when the frequency deviates from the nominal value. Simulation studies are performed using both the data from EMTP-RV software and the user-defined arbitrary signals to demonstrate the effectiveness of the proposed algorithm. Results show that the proposed algorithm achieves good performance under both steady state tests and dynamic conditions.