  We present first results of three dimensional relativistic
magnetohydrodynamical simulations of Pulsar Wind Nebulae. They show that the
kink instability and magnetic dissipation inside these nebulae may be the key
processes allowing to reconcile their observations with the theory of pulsar
winds. In particular, the size of the termination shock, obtained in the
simulations, agrees very well with the observations even for Poynting-dominated
pulsar winds. Due to magnetic dissipation the total pressure in the simulated
nebulae is particle-dominated and more or less uniform. While in the main body
of the simulated nebulae the magnetic field becomes rather randomized, close to
the termination shock, it is dominated by the regular toroidal field freshly
injected by the pulsar wind. This field is responsible for driving polar
outflows and may explain the high polarization observed in pulsar wind nebulae.
