CHESTER went down to local rivals Tranmere Rovers in a lively Pontin's Holidays League Division One West clash at Prenton Park.
City were outgunned in the first period, but made a fight of it after falling two goals behind by the 48th minute.
Dagnall was twice denied early on by City keeper Ryan Brook-field before breaking the deadlock with an angled shot in the 32nd minute.
Dagnall made it 2-0 three minutes after the break with a smart backheel from an Adam Dickinson cross before Brookfield did well to keep out two efforts in quick succession by Paul Henry.
Chester found a goal out of the blue in the 61st minute with a looping effort by Mark Cadwallader following a corner finding its way past Phil Palethorpe.
Rovers then went through an edgy period but should really have sewn the game up as Paul Brown, Dagnall and Dickinson all missed the target by inches.
TRANMERE RESERVES: Palethorpe; Holmes, Lovell, Tremarco, Martin, Henry, Jones (Curran, 46), James, Dagnall (Garry, 90), Dickinson, Brown (Holden, 82). Subs: Connolly, Corrigan.
CHESTER RESERVES: Brookfield; Cadwallader, Newton (Marsh-Evans 46), Roberts, Jones (Holland, 59), Vaughan, Jack, Bertos, Blundell (McCoy, 74), Rutherford, Curie. Subs: Carrol, Morgan.