The crystal structure of the potassium salt of 1-(tetrazol-5-yl)-2-nitroguanidine [K(C2H3N8O2)] was solved and refined from X-ray powder diffraction data by applying the derivative difference minimization (DDM) method. The compound is of interest as an energetic substance. The structure model was found from a Patterson search. The reflection intensities for the Patterson synthesis were derived from the powder profile by applying a newly developed DDM-based profile decomposition procedure. The use of the DDM method allowed successful location and unconstrained refinement of all the atomic positions, including those of three independent H atoms. The advantages of DDM in terms of the precision and reproducibility of the structural parameters are discussed in comparison to Rietveld refinement results. The failure to refine the H-atom positions by the Rietveld method was attributed to systematic errors associated with the background modelling, which are avoided by DDM.