During its settlement, Dayton was called West Liberty and was considered part of the original town of Liberty, founded in 1831 on a four-league Mexican land grant known as Villa de la Santissma Trinidad de la Libertad. By 1837 it was called Liberty. The Trinity River divided the two parts of the town: Liberty on its east bank, and West Liberty on a hill west of the river. A road with ferry crossing connected the two. West Liberty had its own post office with A. Thouvenin serving as postmaster from 1839-1841. Land was designated for a school in 1847 and a schoolhouse was accepted in 1853. Also in 1853, A.N.B. Thompson was authorized to survey and plat the town of West Liberty. The town was a flag stop for the Texas and New Orleans Railroad which was completed in 1860 and became known, in addition to West Liberty, as Days Station and Dayton Station because of the role I.C. Day played in its building and his prominence in the town. The name Dayton was applied to the local post office in 1877, though the official name of the town remained West Liberty until the mid 1880s. In 1885 Dayton reported a population of 60, and in 1890 it had a post office, a school, and three churches that served its increasing number of residents. In August 1898, by vote of 101 to 3, Dayton officially separated from the town of Liberty. At the turn of the twentieth century, Dayton's population substantially increased because of two industries coming to town: rice farming and lumbering. By 1910 the town had 2,500 residents. Dayton was recorded as an incorporated municipality on May 3, 1911 with W.M. Babcock as Mayor, but for reasons unknown was reincorporated in November 1925 with Judge W.S. Neel as Mayor. Dayton's school system was incorporated in 1907, with the structure known today as The Old School, located on West Houston Street and now a museum, serving the students of the town from 1900-1910. The saw mill era lasted only a few years and rice farming has waned in recent years, but they gave Dayton enough determined people to form a town that could grow and prosper.