As with virtually all photographic plate material, the astrograph plates from which the Southern Proper Motion (SPM) catalog is being compiled suffer from magnitude-dependent systematic shifts in the image positions, i.e., a magnitude equation. If left uncorrected, these would adversely affect both the primary goals of the SPM catalog, the absolute proper motions, and the faint secondary reference frame. Using the diffraction-grating images present on the plates, a procedure is adopted that allows a spatially variant magnitude equation correction to be derived individually for each SPM place. Application of the method to similar to 120 SPM fields, primarily around the south Galactic pole and the -30 degrees and -35 degrees declination zones, demonstrates its effectiveness. Indeed, the method proves superior, in the case of the SPM, to a direct calibration of the magnitude equation using the newly available Tycho Catalogue. The result of the diffraction-grating technique is final SPM positions and proper motions that are largely magnitude equation-free, as verified by numerous internal and external checks.