He was briefly the 13th Chief of Staff of the United States Air Force (USAF) for 79 days in 1990 until he was dismissed by U.S. Secretary of Defense Dick Cheney after telling reporters that the U.S. military planned to target Iraqi president Saddam Hussein, his family, and even his mistress in the 1991 Gulf War.

Dugan assumed command of United States Air Forces in Europe on April 12, 1989 and was promoted to general on May 1, 1989, with the same date of rank.

As chief, he served as the senior uniformed USAF officer responsible for the organization, training and equipage of a combined active duty, Air National Guard, Reserve and civilian force of nearly 1 million people serving at approximately 3,000 locations in the United States and overseas.

In September 1990, during the lead-up to the Persian Gulf War after Saddam Hussein's Iraq had invaded Kuwait, Dugan revealed to reporters that the U.S. military had plans to bomb Baghdad "relentlessly" and "decapitate" the Iraqi leadership by targeting Hussein personally, along with his family, his senior commanders, his palace guard and even his mistress.

The list stressed the importance of attacking Hussein and his inner circle, but beyond that, Dugan would not detail the potential Iraqi leverage points he intend[ed] to try to destroy.

[citation needed] U.S. Secretary of Defense Dick Cheney,[4] who had warned Dugan previously about speaking with journalists because he was known to be "loose-lipped,"[5] fired Dugan, saying he had shown "poor judgment at a sensitive time"[6] adding, "We never talk about the targeting of specific individuals who are officials of other governments.

[8] He was allowed to hold onto his four-star rank, and was reassigned as the Special Assistant to the Secretary of the Air Force.