When he became Chester City manager in July 1985, McNally inherited a side that had finished bottom of the Football League a year before and had needed an excellent run under Mick Speight to avoid a similar fate in 1984–85.
[5] He was to soon silence his doubters, as with the help of successful new signings of David Glenn, Milton Graham and John Kelly,[6] the Blues finished runners–up in Division Four for only their second promotion since joining the Football League in 1931.
Although he had to contend with the loss of key players Andy Holden and the prolific Stuart Rimmer through injury, Chester sealed promotion with three games still to play.
Graham Abel, Barry Butler, Carl Dale and David Pugh were successfully captured from non-league football, while Brian Croft, Chris Lightfoot, Aidan Newhouse, Robbie Painter and Colin Woodthorpe all progressed through the youth ranks.
[9] McNally guided Chester to safety before the end of the season in 19th place, although he attracted publicity for the wrong reasons after being hospitalised along with new signing Keith Bertschin after events got out of hand at the club's Christmas party.
But McNally helped oversee an unlikely great escape, with just four defeats in the final 18 matches of the season (including an outstanding 1–0 win at promotion chasing Stoke City on 25 April 1992) seeing Chester finish five points above the relegation zone.
[9] McNally brought the club home to Chester in the newly renamed Division Two with optimism growing for what lay ahead, but unfortunately age was to catch up on many of his side.
Players who played under him often speak with affection about a number of the bizarre incidents he was involved in, such as jumping in a bath containing no cold water when raging at how Chester had thrown the points away in a 4–4 draw with Bury in 1987.