This paper presents a current-stress optimization of the hybrid neutral point clamped-dual active bridge (HNPC-DAB) converter with a novel proposed modulation scheme (PMS) having four control degrees of freedom (DoFs). First, the PMS is analyzed using the available control DoFs. Then, the working of the HNPC-DAB converter is illustrated with the PMS. The soft-switching conditions are derived for all switches in the HNPC-DAB converter. The possible normal operating modes for the converter operation in the forward direction are identified, and their boundaries are also presented. The mathematical model of the aforementioned modes is developed, and the most suitable mode is selected for converter performance optimization. The developed model optimizes the converter current stress, ensuring all switches’ soft-switching. This optimization with the PMS is validated with both simulation and experimental results. Furthermore, the optimization results are compared with the current-stress optimization scheme presented in the literature to justify the effectiveness of PMS.