The proposed multi-rules protective system was used for fast fault detection, at the same time, the neural network-based protective system acted as a secondary and ancillary system that predicts the accurate location of the fault incidence. A protection approach based on the events for a dc system was proposed in [13]. The propounded protection scheme brings less data transfer than the prevalent data-based protection strategy. In [14], a differential-based protection approach was recommended for dc networks, which was able to detect faults in sub-milliseconds. This research employed the inherent specifications of dc differential current values in order to achieve a remarkable reduction in the time required for fault detection compared to other approaches. In [15], a differential-based protection procedure in mesh-type dc microgrids was proposed. This method employed a specific threshold for fault detection. The trouble of threshold selection is the issue of differential-based protection in the dc microgrid system. Obviously, the time of fault detection of the differential-based procedure is completely affiliated with the threshold value selection, the time window selection, protection algorithm complexity, and communication delay. An increase or decrease in the threshold value increases or decreases the fault detection time, which is a major problem in differential protection as it has a completely direct relationship with the time of fault detection. Additionally, there are no standards, solutions, or published experiences in dc grids, leading to problems in selecting the threshold value in the differential method. Hence, this value is specified by the microgrid structure and operator's experience, which is the major bug of this approach, that is, the protection algorithm depends on human action and considerations. In [16], the use of the linear observer for transmission line protection has been investigated in ac microgrids. Merits and drawbacks of this method include the fast fault detection and lack of robustness to disturbances, respectively. The use of the linear observer with minimum sensors for lines and transformer protection has been presented in [17]. For instance, in [18] a state-dependent Riccati equation (SDRE) non-linear observer was used for fault detection in wind turbines. This paper recommends a structure for the design of a nonlinear observer via a state-dependent differential Riccati equation (SDDRE) instead of algebraic Riccati equations that can require an excessively restrictive necessity for system visibility and manageability. Via expanded linearization of the dynamics procedures, the SDDRE and a solution of SDRE could be determined via utilizing the numerical unification approaches. The obtained results in [16; 17; 18] demonstrate the ability to use a linear and nonlinear observer to detect faults in microgrids. The observer-based methods can also be used for fault detection in the microgrids. Unlike conventional protection, there is no need for an adaptive protection system that needs to adapt to network changes and variations. The current research presents a novel approach for fault detection based on an SDRE nonlinear observer-controller to accommodate the characteristics of an SDRE observer-controller and nonlinear dynamics of dc microgrids. This method shows suitable speed and accuracy, can detect faults and is robust against disturbances. To verify the capability and the conceivability of the proposed protection scheme, the simulated circuit and fault detection procedures are fulfilled and examined at a prototype laboratory size.