Dansungsa was first built as a single screen, two-story wooden building in 1907, during the Korean Empire period.

[4][2] Dansungsa held a position of prestige in the Korean cinema world for decades afterwards, and was considered a significant place for the first screenings of movies.

The declaration celebrated both the Korean film industry and the movie theaters Dansungsa, Umikwan [ko], and Chosun Theater [ko], which were the only theatres showing Korean movies during the period of Japanese colonial rule.

[2][5] The theater renovated from 2001 to 2005 into a multiplex with ten screens and a seating capacity of 1,802,[5] but this did not halt the decline.

However, it failed to make a return on the renovation investment, and saw a record 11 billion won in losses in 2007.

The company failed to pay back a 1.5 billion won ($1.3 million) loan to Woori Bank in 2008, and went bankrupt.