This paper addresses the analysis of three-phase squirrel-cage induction machine (IM) with interturn short-circuit (ITSC) fault and its influence on direct torque control (DTC). The particularities of the DTC such as its behavior, its standard heuristic derivation, and its nature of been a nonlinear hysteresis-based predictive controller are exploited, thus allowing the improvement and development of alternative explanations to the phenomena. The understanding of DTC and the development of the current state-space model of the asymmetric IM, presented here for first time in the literature, enables the analytical treatment of the research topic and the discovery of several DTC reactions to the fault. The ITSC impact on DTC and its reaction leads to the following twofold characterizations: first, unobservable and visible effects, and second, compensation and tolerant reactions. For purposes of simulation, a plug-and-play configurable circuit-block for the asymmetric IM was developed based on Norton's equivalent circuit. Simulation and experimental results demonstrate the assertiveness of the developed analyses and theoretical findings, which allows future research in online fault diagnostics and condition monitoring of inverter-fed IM with this type of fault.