This paper investigates the efficacy of Demand Frequency Reserve (DFR) in Nordic power system. Heat pump, due to its switching flexibility, less disturbing impacts to customers and promising future in application, is used to represent DFR in the study. Thermodynamics of the heat pump unit is modelled to investigate the dynamic behaviour of DFR. Two DFR control logics, designed according to different appliance features, are implemented into the heat pump model. In this study, DFR acts as both disturbance and normal operation reserves to fulfill the requirement of frequency reserve by Danish Transmission System Operator (TSO). Accordingly, two case scenarios are designed for the contingency and normal operation, respectively. The simulation models are implemented in RTDS, by means of which the Hardware In the Loop (HIL) test of the developed frequency response device (SmartBox) is carried out.