The first members of the development squad (started in the team's second season) were Adam Barras and Ashly Donald from the Warrandyte Venom (formally of the SEABL) both aged 19.
Price resigned his position on 22 October 2006 after the Dragons lost their first five NBL championship season games, citing family reasons; he was replaced by Shane Heal, who was appointed as captain and interim coach for the remainder of the season,[2] The following day Price spoke to the media and claimed that Heal had undermined his position, stating, "I've been in professional basketball a long time and I've never seen undermining of a coach quite like this before.
On Boxing Day, 2006, the South Dragons claimed a memorable victory over their cross-town rivals, the Melbourne Tigers 107–94, leaving its mark on this newly formed rivalry in front of 9175 fans at Vodafone Arena.
[5] This came after the team once again started the season with six straight losses, prompting the sacking of import Nick Horvath, who was replaced by American Bakari Hendrix.
On 9 January 2008, with the team sitting on the bottom of the ladder at 4–17, assistant coach Michele Timms resigned from the club, citing overseas job opportunities as the reason behind her sudden departure.
Timms wouldn't be the only coach to go, as the club announced on 1 February 2008 that player-coach Shane Heal had been sacked, effective immediately.
Despite returning to the winners list and showing greater energy and competitiveness under Molloy, the Dragons finished the season on the bottom of the ladder with a 5–25 record.
[6] On 3 March 2006, it was reported by Melbourne's Herald Sun newspaper that former Australian star Shane Heal was considering coming out of retirement to captain the Dragons for the 2006-07 NBL season, and is involved in contract negotiations with the team.
[9] The Dragons were unable to sign Schenscher because the Chicago Bulls called him up to fill a roster vacancy earlier that month.
After a disastrous 2007–08 NBL season, in which the team only won a handful of games, the Dragons looked set to try to rebuild quickly.
The home-court advantage was crucial as they went on to win the championship by defeating Townsville 2–1 in the semi-final and Melbourne 3–2 in the Grand Final series.