The human eye is an organ which gives a sense of sight. Diabetic retinopathy is a most common diabetic eye disease which is a leading cause of blindness in India. Diabetic Retinopathy is a disease in which the retinal blood vessels swell and it may even leak. This damages the retina of the eye and may lead to vision loss if the level of diabetes is very high. Early diagnosis of Diabetic Retinopathy can prevent vision loss in patients. The method proposed in this paper for detection of Diabetic Retinopathy(DR) disease level emphasizes on determination of three important types of Diabetic Retinopathy; Macula Edema, Hemorrhages and Exudates. These types can be extracted using fundus images of patients and processing these fundus images through an appropriate image processing technique. Based on the presence of these types and their amount in the fundus image will determine the level of diabetic Retinopathy in patients.