Vector control is employed in induction motor drives to provide a fast torque response. Various vector control methods have been proposed before, among which Direct Torque Control provides high dynamic performance with very simple control scheme. Basic DTC scheme is based on hysteresis control of flux and torque. The dynamic torque performance is very important in traction and electric vehicle applications. Amethod to achieve fastest dynamic performance by modifying the basic DTC scheme is discussed in this paper. This is achieved by applying a single voltage vector that produces the largest tangential flux component, at the time of torque dynamics. The modified method is used in sensorless speed control of induction motor. The new scheme was analysed using SEQUEL simulation tool.