Dillon is located in Montana's Gold West Country. It began its early days as an important shipping point from Utah to the gold fields of Montana. The Utah and Northern Railroad reached Dillon in the fall of 1880, but the town was named for the president of the Union Pacific Railroad, Sidney V. Dillon. The rich agriculturally valley was a welcomed place for Sheep ranching that was introduced in 1869. At one time Dillon was the largest wool shipping point in Montana. The first cattle were brought to the valley in 1865 and they, too, have played a major role in Dillon's development. The area was central to early Montana mining camps and settlements. Bannack, Montana's first territorial capital and now a well-preserved ghost town, is nearby.
Today, Dillon has a population of about 4,000 people.