This paper studies principles of developing dc transmission grids based on high power dc/dc converters. There has been much research on dc/dc converters and it is likely that some megawatt size units will achieve commercialisation stage soon. In this study, we assume that electronic dc transformers can achieve three functions: 1) voltage stepping, 2) voltage (or power) regulation, and 3) fault isolation. The location, sizing, and control of dc transformers is first analyzed using a simple 4-terminal, 1.8 GW dc grid. It is postulated that this grid would be a better alternative to a point-to-point HVDC. Detailed simulations on PSCAD/EMTDC demonstrate the capability to independently regulate power flow in each dc branch. The simulations of worst case faults on dc lines and ac grids show that dc transformers can isolate the faulted segments enabling the remaining part of the grid to operate normally. The generic principles of developing more complex dc grids with meshed power flows, are also presented. It is concluded that there are no significant technical barriers in developing dc transmission grids but the cost and losses of dc transformers remain as the primary challenges.