It was one of the first "nationalist schools" opened after the First National Strike against the British rule in Burma.
The current building was built in 1929 as part of a nationwide movement by the nationalist Burmese to counter what they perceived as drawbacks of the British colonial education system: lack of access, and a heavily biased curriculum.
Even the wealthy Burmese who could afford the schools were unsatisfied with the heavy Anglo-centric nature of the curriculum.
Throughout the 1920s, the nationalist Burmese set up a parallel education system of national schools throughout the country.
Dagon 2 today draws its student body overwhelmingly from well-to-do families who can pay a large "donation" every year.