DDS (Direct digital synthesizer) is widely used for frequency synthesis. The factors that contribute to spurious signals are analyzed. Adding a random signal to DDS system was used for spurious reduction formerly. Those methods assuredly reduce the spurs while the noise floor of signals is worsened. A new spurious reduction technique based on two DDS is proposed. The first DDS generates the conventional sine signal. The other DDS produces the error signal which compensates for the phase truncation error in traditional DDS system. A spurious reduction circuit has been developed. The experimental result indicates that the spurious signal due to phase truncation can be reduced 8dBc at least.