An improved DPS-QKD scheme is proposed and demonstrated in this paper. At Alice's site，we use a M-Z interferometer to produce two coherent pulses. At Bob's site，a Faraday-mirrors-based Michelson interferometer is used instead of a M-Z interferometer to auto-compensate for the phase drifts and polarization mode dispersions in the fiber. It enhances the security of the whole system to use the two quantum cryptography protocols (namely the two pulse DPS-QKD scheme associated with the BB84 scheme). It is shown in our experiment that such a system features perfect stability with a quantum bit error rate less than 5% and high key generation rate. This scheme has been implemented successfully during the 80km fiber transmission.