Conventional phasor estimation methods can causes error if the envelope of the signal is changed according to time. In this paper, a modified dynamic phasor estimation method was proposed to overcome the disadvantages of conventional phasor estimation methods. To evaluate the performance of the proposed method, a fault location algorithm which uses the proposed phasor estimation method was tested over varying fault distances and fault resistances. The results of fault location regarding a various cases using the proposed phasor estimation show a very small error compared to conventional phasor estimation based fault location methods.