John Reed was a premature arrival in this area; he tried to open a trading post in the 1840s but the Dakota Indians, who still had legal claim to the land, evicted him. Jeremiah Tibbetts arrived in 1847 with a group of Dakota and built a small trading post; he gets the credit for coming up with town’s name. Nathan Brown, a native New Yorker, showed up in 1849 and organized the village. Brown could not get a trading license from the US government, either, but he successfully negotiated a deal directly with Chief Wabasha for trading rights.
The early settlers lived in an area known as Old Dakota that was platted in 1855. In 1873, the town was re-surveyed on higher ground. All development from that time forward took place in the new plat; nothing remains of Old Dakota. Dakota was devastated by a severe measles epidemic in 1882 that killed many residents and brought the town’s economy to a halt. When folks recovered, the village did a nice business shipping grain downriver. The town also got a boost from the arrival of the railroad in 1872, which, besides shipping people all over the Midwest, also shipped a lot of cattle before the Depression.
In the 1910s, the good folks of Dakota fought a battle with the War Department (the bureaucratic home of the Army Corps of Engineers, which has jurisdiction over shipping along the Mississippi River) over a proposal to shift the main channel of the river from the Minnesota side (in front of Dakota) to the Wisconsin side. Many residents made their living from working on the river and feared that changing the channel would hurt their business. They lost, and they were right. In 1951, the rail depot closed, but for a few years afterwards, locals could still board a passenger train by flagging down one of the trains as it passed through town. Like many of its neighbors, Dakota lost most of its older buildings to highway construction in the 1960s. Dakota today is a bedroom community.