In September 1978, Dwyer joined Úrvalsdeild karla club Valur as player-coach, replacing recently departed Rick Hockenos.
[2] He debuted with the team in the annual Reykjavík Basketball Tournament where he scored 19 points in Valur's 100–84 victory against Íþróttafélag Reykjavíkur.
[9] After some uncertainty of his return due to his financial demands,[10][11][12] Dwyer eventually resigned with Valur prior to the 1979–80 season.
[13] On 17 March 1980, he helped Valur to its first national championship after scoring 28 points in the team's 100–93 victory against defending champions KR in the last game of the season.
[25][26] Three days later, on 24 March, Dwyer scored 9 points but fouled out in the beginning of the second half of Valur's 78–75 victory against ÍR in the Icelandic cup finals.
[29] In February 1979, Dwyer was hired as the head coach of the Icelandic men's national basketball team ahead of its games against Scotland and Denmark.