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With the NRL's intention to rationalise the competition from 20 teams down to 14 teams and with a M incentive and a relaxing of salary cap requirements for a merger, the Dragons and the Steelers ensured their survival by forming the League's first merger on 23 September 1998.Merged entity being a new concept in Australian rugby league, the public watched closely in anticipation of success or failure.The Dragons, however, missed out of the finals series, and came 9th.Despite their poor season, Trent Barrett was awarded with the Dally M Medal.This was the second biggest comeback in Australian Rugby League history.
The Dragons were forced to perform a drop kick from their own goal line, and on the fifth tackle Brett Kimmorley kicked high towards the Dragon's corner of the field.
An extraordinary scoreline was seen in the round 25 clash with Manly.
Trailing 34–10 after 53 minutes the Dragons came back to win the match 36–34.
No-one was certain how the top players sourced from the merged two feeder clubs would perform when they ran out onto the field.
They were unsuccessful in their first outing, losing to the Parramatta Eels 20–10, but by the 4th round they had started to form some cohesion and would go on to achieve a top 8 position on the competition ladder by the end of the regular season.
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Soon after the replacement of coaches, the Dragons recorded their best ever win.