Their largest subsidiary is the New York, Susquehanna and Western Railway (NYS&W), and reorganizing them expanded DO's status from a short line company to a regional railroad network.

The NYC cut back operations to Bloomville, and DO subsequently acquired a 2.6-mile (4.2 km) section of the branch between Oneonta and Mickle Bridge.

[4] Their tourist trains operated on the branch between the passenger station near their interchange with Delaware and Hudson Railway (D&H), and Mickle Bridge.

[6] Before operations were planned to commence, the branch's sole customer, a cement plant, shut down, and the KTER was quickly dissolved.

[7][8] On October 3, 1997, DO Acquisition LLC announced that it had completed the short-form merger of Delaware Otsego with a wholly-owned subsidiary via a stock tender offer of $22 per share.

[citation needed] As of 2024, the NYS&W railway continues to operate freight trains between Syracuse, New York and North Bergen, New Jersey.

[13][14] In 1982, Conrail petitioned to abandon their former Erie Lackawanna branches from Binghamton to Jamesville and Utica, and portions of the former Lehigh and Hudson River Railway (L&HR) Warwick, New York, and Limecrest, New Jersey.

In 1972, DO purchased the Erie Lackawanna's 22-mile (35 km) long Richfield Springs Branch, and they reactivated it as the Central New York Railroad (CNYK).

DO revived the branch's original name, the Cooperstown and Charlotte Valley Railroad (CACV), and they commenced tourist and freight operations on the line.

[5] Following the Early 1980s recession, the FJ&G lost their final remaining major customers, and in 1984, the railroad was shut down from financial losses.

In 1975, the Erie Lackawanna Railway requested to be absorbed into Conrail, but some of their routes, including the Honesdale Branch, were rejected from inclusion.

Officials from Wayne County campaigned to save the line to protect the customers it served, and they searched for an operator to take over the branch.

The earliest portions of the Staten Island Railway were built in 1860, connecting the ferry landing at Tompkinsville with the village of Tottenville, New York.

The B&O financed the construction of new ferry terminals and slips at St. George, as well as a branch along the north shore of the island to connect to New Jersey via a bridge over the Arthur Kill.

[23] The B&O and their successor, the Chessie System, continued to operate freight service on the island until April 1985, when the SIRT was sold to Delaware Otsego.

The Rahway Valley Railroad (RV), which had gained freight-shipping profits after World War II, operated at a financial loss, following the formation of Conrail in 1976, and an increasing number of their freight customers switched to truck-shipping.

[17][22] Freight traffic had significantly declined by that time, and service was commonly provided by Staten Island Railway crews.

[22] On May 9, 2002, the Morristown and Erie Railway signed a 10-year operating agreement with the state to acquire and rehabilitate the remaining RVRR and SIRY trackage.

In 1995, the NYS&W acquired a 40% interest in the Toledo, Peoria and Western Railway (TP&W) of Illinois, with full control going to DO the following year.