In view of the shortage of material and structure of current DC sensor, a new type of DC leakage current sensor based on magnetic modulation is proposed. The sensor uses Fe based nanocrystalline material as magnetic core. Based on magnetic modulation LR oscillator, the magnitude and direction of DC leakage current can be measured by detecting the change of voltage at the winding end and pulse width. A method of differential difference between two coils winding on the same core is used to suppress the zero drift and improve the stability of the system.The model of magnetic modulation sensor is established in the simulation software PSPICE.The simulation analysis of the DC sensor based on magnetic modulation provides the theoretical basis for the design of the DC sensor based on the Fe based nanocrystalline.