High quality $YBa_2Cu_3O_y$(YBCO) thin films for directly coupled dc superconducting quantum interference device (SQUID) were fabricated by pulsed laser deposition. Several critical parameters have been optimized through systematic studies. Thus, the films showing the $T_c$ of above 91K and $J_c$ of above$2 imes10^6A/cm^2$ at 77K were routinely obtained. Extensive AFM and X-ray diffraction studies have been conducted for morphological and structural analyses. The directly coupled DC-SQUIDs were fabricated from the YBCO thin films deposited on $SrTiO_3$ bicrystals under the optimized conditions. The measurement on $2I_c$ and swing voltage give 200$mu$A and 17$mu$V at 77K, respectively.