Dally dies in The Outsiders after robbing a grocery store and then being confronted by the police. He pulls out a gun, which Ponyboy knows is unloaded because Dally had told him so earlier, and raises it at the officers. The police, unaware that the gun is not loaded, shoot and kill him immediately

. Dally's death follows the death of Johnny, who was the only person Dally truly cared about. Johnny's death devastates Dally and leaves him feeling hopeless and without a reason to live. This emotional breakdown leads Dally to deliberately provoke the police into shooting him, essentially committing suicide by cop. Ponyboy recognizes that Dally wanted to die that night, as he had lost all hope after Johnny's death and never learned to see the good in life

. Despite his tough exterior and criminal background, Dally's death is seen as "gallant" by Ponyboy, reflecting the complex nature of his character. He dies violently and young, but with a sense of grim triumph, as if taking control of his fate in his final moments

. In summary, Dally dies by being shot by the police after a deliberate act of robbing a store with an unloaded gun, intending to be killed as a way to escape his pain following Johnny's death