Self-excited induction generators (SEIGs) used in wind energy systems suffer from poor voltage and frequency regulation due to varying active/reactive power demands of nonlinear and unbalanced loads. The distribution static compensator (DSTATCOM) provides an effective solution through reactive power support and harmonic mitigation. However, its performance strongly depends on the robustness of the control algorithm against harmonics, load imbalance, and sensor-induced measurement errors such as DC offset, which degrade reference current generation. This study proposes an Advanced Dual Fourth-Order Generalized Integrator (ADFOGI)-based control algorithm to improve voltage and frequency regulation of SEIG–DSTATCOM systems under such adverse conditions. The proposed method inherently rejects DC offset components and enables accurate reference current generation even under severe harmonic distortion, load imbalance, and transient disturbances. The effectiveness of the approach is validated on an OPAL-RT real-time platform under three scenarios: nonlinear load, unbalanced nonlinear load, and one-phase open-circuit condition, where DC offset is intentionally introduced to emulate sensor errors. Under the most severe case, where load current THD reaches 16.23%, SEIG current THD is reduced to 3.71% and voltage THD to 1.66%. In all scenarios, harmonic levels remain below the IEEE-519-2022 limit of 5%, confirming the robustness and effectiveness of the proposed control strategy.