He worked as a clerk and manager of a coal merchant in Tipperary Town, prior to the Irish War of Independence.

Just prior to the start of the Civil War (February 1922) Lacey led a successful raid on the barracks at Clonmel in which hundreds of rifles, 200,000 rounds of ammunition, bombs, and multiple armoured cars were seized by the republicans.

[5] In the ensuing civil war (June 1922-May 1923), he organised guerrilla activity in the Tipperary area against Irish Free State (pro-Treaty) forces.

Over 1,000 Free State troops, under the command of General John T. Prout, with the intention of breaking up his guerrilla unit, converged on the Glen where he and four other men from his column were billeted.

[8] Dinny's brother Joe Lacey (also a member of the IRA) died on 24 December 1923 in the Curragh Camp hospital from his weakened condition caused by his participation in the 1923 Irish Hunger Strikes which had ended a month earlier.