There were 305 households out of which 29.8% had children under the age of 18 living with them, 55.1% were married couples living together, 13.4% had a female householder with no husband present, and 28.2% were non-families. 23.6% of all households were made up of individuals and 8.9% had someone living alone who was 65 years of age or older. The average household size was 2.53 and the average family size was 2.99.
In the borough the population was spread out with 24.5% under the age of 18, 6.9% from 18 to 24, 28.8% from 25 to 44, 26.1% from 45 to 64, and 13.7% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 97.2 males. For every 100 females age 18 and over, there were 89.6 males.
The median income for a household in the borough was $44,219, and the median income for a family was $50,125. Males had a median income of $31,250 versus $25,865 for females. The per capita income for the borough was $19,227. About 5.1% of families and 6.5% of the population were below the poverty line, including 4.9% of those under age 18 and 16.3% of those age 65 or over.
The surrounding township is called Middle Paxton, part of the former Paxton Township of Lancaster County prior to the creation of Dauphin County in 1785. Middle Paxton Township was incorporated in 1787. The main feature of geography of this area are ancient hills or mountains and narrow valleys that generally run east to west with streams emptying into the Susquehanna River. The township remained rural until the twentieth century.
Judge Green laid out Dauphin as Port Lyon in recognition of the former Fort in 1826. Green named the Port Lyon streets after Pennsylvania rivers and creeks. Opportunities for economic expansion for the area appeared bright that year, as legislation was passed for creation of the Pennsylvania Canal. This fostered expectations that Dauphin would become a port to the coalfields lying to the northeast. Green acted on behalf of the Dauphin & Susquehanna (D & S) Coal Company, which had purchased eighteen tracts of land on or near Little Mountain, totaling about 7,000 acres (28 km²), from a group of businessmen. Charles Bird had earlier that year purchased four tracts of land in Middle Paxton Township from Judge Green. Bird's interest was purchased by a group of businessmen who then sold to the D & S Coal Company. Green received the last payment on the agreement price of US $10,000.00 in 1835.
Dauphin was incorporated into a borough by an act of Assembly in 1845. According to the 1850 census, Dauphin had 650 inhabitants at that time. There were 124 families in 118 dwellings. The 1860 census for the borough illustrated the working-class nature of the people living there. The borough had 649 inhabitants in 129 households, nearly the same as recorded in 1850. Fifty-five of the men listed their occupation as "day laborer." The 1870 census showed a marked change in the occupation of Dauphin's residents. Jobs related to the canal had dropped dramatically, while those associated with the railroads had increased substantially. At this time there were 151 households living in 148 dwellings. The borough's population had increased to 742. By 1875, the borough contained four churches, three schools and one select school, and two lodges. The 1880 census showed 155 families living in 146 dwellings in Dauphin, but by now they occupied 154 dwellings.
In the early twentieth century, several "summer" houses were constructed on the edge of Third Mountain, south of Stony Creek. Middle-class residents of Harrisburg City built these houses as second homes to supplement their primary townhouses. These houses are collectively called "Hillside" and have since become year-round homes.
The borough has always been associated with transportation, situated along the Susquehanna River. Original Native American trails would have followed waterways such as the river and Stony Creek. Development of the canal system of transporting goods during the early nineteenth century gave way to the rise of the railroads, which lasted for much of the twentieth. U.S. Route 22 became a major highway through Pennsylvania during the mid-twentieth century, parts of which were actually constructed within the footprint of the former Pennsylvania Canal. Dauphin thus developed as an early transportation hub, but in more recent decades had been bypassed by more significant routes of transport, such as the Eisenhower Interstate Highway System.
In the last forty or so years, Dauphin Borough has been a bedroom community of Harrisburg, the Pennsylvania state capital. Many of its civic centers had gone into steep decline, industry migrated elsewhere, taverns and hotels closed, as did schools and churches. The railroad, which declined during the late twentieth century, has been reduced to two tracks paralleling the river, with no stops or stations in Dauphin. One of the reasons for the decline was that as traffic on U.S. Rte. 22 increased, the borough became less desirable as a place in which to reside. By the 1980s, traffic on Rte. 22 was so heavy that the road essentially cut the Borough in half. Residents often had such a difficult time traveling across the borough that they waited until after morning and evening rush hours. On weekends when the Pennsylvania State University in State College some ninety miles upstate, held football games Rte. 22 through the borough was impassable.
In older times, Dauphin was the hub of a collection of small village centers in Middle Paxton Township of Dauphin County. Some of these settlements included: Singersville, nearby the borough; Ellendale Forge, two miles up Stony Creek Valley; Dauphin Furnace, at the mouth of Clark Creek; Speeceville, at the foot of Peter's Mountain; and Heckton Mills, about a mile downriver from Dauphin. Much of the eastern part of the township, between Peters Mountain and Second Mountain, is forested and preserved as State Game Lands.
Most of these village centers have ceased to exist as the western part of Middle Paxton Township became suburbanized. The nearest organized towns to Dauphin are Duncannon, a borough on the western shore of the river; Halifax, a borough north of Peters Mountain; and Harrisburg, the state capital to the south.
In the late 1990s, following many years of planning and several postponements, Dauphin Borough was bypassed. A construction project that had caused much controversy resulted in relocating U.S. Rte. 22 closer to the river and out of, or over, Dauphin Borough. Approximately 33% of the borough's taxable real estate was destroyed in order to construct the bypass. The remaining town, free of the traffic problems, became once again desirable as a location for commuters to Harrisburg. Some of the last remaining open land in the borough was developed as residential space, and older structures in the borough were increasingly bought and renovated by commuters. Despite the losses in tax revenues owing to construction of the bypass, the local government hangs on.