diff --git a/examples/configs/sft.yaml b/examples/configs/sft.yaml
index 785b6e0d2e..28126b526c 100644
--- a/examples/configs/sft.yaml
+++ b/examples/configs/sft.yaml
@@ -47,6 +47,10 @@ policy:
       weight_decay: 0.1
       betas: [0.9, 0.98]
       eps: 1e-5
+      # when using Dtensor, we need to set foreach
+      # and fused to False
+      foreach: False
+      fused: False
     
 data:
   max_input_seq_length: ${policy.max_total_sequence_length}
diff --git a/nemo_reinforcer/algorithms/loss_functions.py b/nemo_reinforcer/algorithms/loss_functions.py
index d674e7deb0..ef5a698678 100644
--- a/nemo_reinforcer/algorithms/loss_functions.py
+++ b/nemo_reinforcer/algorithms/loss_functions.py
@@ -112,7 +112,7 @@ def __call__(
             next_token_logprobs = torch.nn.functional.log_softmax(
                 next_token_logits, dim=-1
             )
-            next_tokens = data["input_ids"][:, 1:]  # Skip first token
+            next_tokens = data.get("input_ids")[:, 1:].cuda()  # Skip first token
             curr_logprobs = next_token_logprobs.gather(
                 dim=-1, index=next_tokens.unsqueeze(-1)
             ).squeeze(-1)
@@ -168,14 +168,22 @@ def __call__(
         sample_mask = data["sample_mask"]
         mask = token_mask * sample_mask.unsqueeze(-1)
 
-        next_tokens = data.get("input_ids")[:, 1:].cuda()  # Skip first token
-        next_token_logprobs = torch.nn.functional.log_softmax(next_token_logits, dim=-1)
-        logprobs = next_token_logprobs[:, :-1]  # Remove last position's logits
+        next_token_logits = next_token_logits.to(torch.float32)
 
         # Gather the logprobs for the actual next tokens
-        token_logprobs = logprobs.gather(
-            dim=-1, index=next_tokens.unsqueeze(-1)
-        ).squeeze(-1)
+        if isinstance(next_token_logits, torch.distributed.tensor.DTensor):
+            token_logprobs = get_logprobs_from_vocab_parallel_logits(
+                next_token_logits, data["input_ids"]
+            )
+        else:
+            next_tokens = data.get("input_ids")[:, 1:].cuda()  # Skip first token
+            next_token_logprobs = torch.nn.functional.log_softmax(
+                next_token_logits, dim=-1
+            )
+            logprobs = next_token_logprobs[:, :-1]  # Remove last position's logits
+            token_logprobs = logprobs.gather(
+                dim=-1, index=next_tokens.unsqueeze(-1)
+            ).squeeze(-1)
 
         # Only compute loss on generated tokens (not input tokens)
         # by applying the token_loss_mask (shifted by 1 since we're predicting next tokens)
diff --git a/nemo_reinforcer/algorithms/sft.py b/nemo_reinforcer/algorithms/sft.py
index 45f4f08575..e6a6b3f418 100644
--- a/nemo_reinforcer/algorithms/sft.py
+++ b/nemo_reinforcer/algorithms/sft.py
@@ -237,6 +237,7 @@ def validate(
 
         val_metrics = {"val_loss": 0.0}
 
+        policy.prepare_for_training()
         for batch_idx, val_batch in enumerate(val_dataloader):
             ## add loss mask based on role to every message
             add_loss_mask_to_message_log(
@@ -247,6 +248,9 @@ def validate(
             cat_and_padded, input_lengths = batched_message_log_to_flat_message(
                 val_batch["message_log"],
                 pad_value_dict={"token_ids": tokenizer.pad_token_id},
+                make_sequence_length_divisible_by=master_config["policy"][
+                    "make_sequence_length_divisible_by"
+                ],
             )
 
             val_data: BatchedDataDict = BatchedDataDict(
@@ -358,6 +362,9 @@ def sft_train(
                 cat_and_padded, input_lengths = batched_message_log_to_flat_message(
                     batch["message_log"],
                     pad_value_dict={"token_ids": tokenizer.pad_token_id},
+                    make_sequence_length_divisible_by=master_config["policy"][
+                        "make_sequence_length_divisible_by"
+                    ],
                 )
 
                 train_data: BatchedDataDict = BatchedDataDict(
diff --git a/nemo_reinforcer/models/policy/dtensor_policy_worker.py b/nemo_reinforcer/models/policy/dtensor_policy_worker.py
index c967a53c97..a7c7f717fb 100644
--- a/nemo_reinforcer/models/policy/dtensor_policy_worker.py
+++ b/nemo_reinforcer/models/policy/dtensor_policy_worker.py
@@ -321,6 +321,7 @@ def train(
                 mb_losses.append(loss.item())
                 all_mb_metrics.append(loss_metrics)
 
+            grad_norm = None
             if not eval_mode:
                 with torch.no_grad():
                     grad_norm = get_grad_norm(
@@ -347,7 +348,7 @@ def train(
         with torch.no_grad():
             local_loss = torch.tensor(losses, device="cuda")
             global_loss = torch.zeros_like(local_loss)
-            torch.distributed.all_reduce(local_loss)
+            torch.distributed.all_reduce(local_loss, group=self.dp_mesh.get_group())
             global_loss = local_loss / self.dp_size
 
         # Aggregate metrics across all microbatches