The modification of the Transformed Model Fitting /TMF/  method developed for evaluation of the single-line profiles from high-resolution neutron powder diffractometers is proposed . More sophisticated real-space model  is used for the distortion and crystallite size broadening of the diffraction lines. The new PC program based on this model has been tested on neutron diffraction profiles collected in situ upon tensile deformation tests of the plain ferritic steel. The deformation test was performed in the incremental mode in which each individual deformation step was followed by unloading. The neutron diffraction spectra were collected both upon loading and unloading and behavior of the diffraction profiles in elastic as well as in plastic region of the deformation curve was examined in detail. Comparison of microstress values in loaded/unloaded state and in elastic and plastic region offers interesting possibility to separate the contribution of the type II and type III microstresses.