To accelerate the operation speed of differential protection and improve the reliability and security is the primary challenging problems in the area of digital protection of transformers. Distinguishing between the magnetizing inrush and internal fault currents is vital consideration. Existing methods, mostly based on second harmonic restraint, do not satisfy the requirement of modern transformer protection. A new restrained scheme based on virtual third harmonic was put forward. The prototype of digital transformer protection which adopts the new restraint scheme was installed in the industrial in July 1999. In this paper, following the initial investigation, the operation characteristics of the prototype of the digital transformer protection are analyzed in detail.