Dagmar was named in honor of Queen Dagmar of Denmark. The Danish-American community is the trade center for the community that includes a store, a coal mine, a fire insurance company, a telephone exchange, and a burial association. The first post office was established in 1907 with E. F. Madsen as postmaster.
Dagmar is located in northeastern area of Montana, near the North Dakota line and the Canadian border on Montana Highway 16 south of Plentywood.