Despite its riding comfort, which was "equal to a car's", it did not sell well, and only 1,457 Dragonfly motorcycles were produced before the company was taken over and production ended in 1957.

Aiming to overcome the company's outdated image, designers were commissioned from the Reynolds Tube Company to develop a completely new open duplex frame of welded tubing, including a swinging arm with twin Girling dampers (state of the art for the time) with leading link front suspension.

The strengthened and streamlined 348 cubic centimetres (21.2 cu in) engine had a modern coil ignition, AC generator and distributor, with bolt-through cast iron cylinders and heads and pushrods made from Duralumin.

[5] The launch of the Dragonfly was the last chance of survival for the Douglas company when it featured at the 1954 Earls Court motorcycle show in a big display held in a giant micrometer.

[citation needed] Douglas decided to concentrate on importing and license building Vespa scooters which were increasing in popularity, and only a little over 1500 Dragonfly motorcycles were ever built.