Abstract: The DGPS positioning model is introduced and the RTCM SC-104 message content is described. The design scheme of the DGPS reference station based on cheap GPS-OEM is proposed. This kind of DGPS reference station is composed of GPS-OEM and microprocessor. The general GPS receiver only can receive the RTCM SC-104 differential correction message, so the binary correction message output by GPS-OEM must be encoded into the RTCM SC-104 standard format. The DGPS positioning experiment was made. The experiment result proves that the positioning precise of the DGPS system constructed by this DGPS reference station can reach to 1~5 meters. Therefore, this DGPS system is economical and practicable.