The Dubuque & Pacific Rail Road was chartered on April 18, 1853. It was not until the fall of 1855 that the first ceremonial shovel of dirt was overturned. In May of 1856, the D&P received a federal land grant from Dubuque to a point near Sioux City on the Missouri River. It was one of four given, and started a race to see who could make it to the Missouri River first. But the track laying went slowly for the D&P, reaching only 78 miles west of of Dubuque over a four year period.

Morris K. Jesup became involved and put the D&P into receivership and on August 1 of that year the Dubuque & Sioux City Railroad was incorporated. The line reached Cedar Falls just in time for the opening rounds of the Civil War, which put a halt to any further construction until 1865.

By June of 1866, the line had reached 143 miles west to Iowa Falls, roughly half way across the state. However, the other three land grant railroads were nearing the Missouri River and connection with the Union Pacific.

As the other three did not connect with the Illinois Central Railroad, but the D&SC did, this threatened to cause a loss of traffic for the IC. So the IC arranged to lease the D&SC in 1867.