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The original town of Dillon was built as a stage stop and trading post on the northeast side of the Snake River. The town was named for Tom Dillon, a prospector, and was incorporated in 1883. By 1892 the town had been relocated twice, both times in order to be closer to railroad lines that were extended into the area. All three of these historic townsites were situated very close to the Blue River Valley confluence where the Snake River and Tenmile Creek flowed in, and this area is now referred to collectively as "Old Dillon".