Dagny Unsgaard Nygaard was born on 31 August 1899 in Tydal, Norway, to Berit Stuedal Unsgaard, a midwife, and David Unsgaard, a furniture builder and farmer. Dagny had six siblings.

Dagny took a job as a salesclerk at a general store until she was 21 when she went home to care for her mother who died shortly after. Dagny married in 1927 to Lars Nygaard, a carpenter. He found a sponsor to America and left behind Dagny and their new baby girl, Inger. He stayed with people from Tydal in Minnesota helping out on the farms until he got a work for a building contractor in Montana. When he earned enough money a year later, he sent for Dagny and the baby. They were denied their passports the first time, so waited another year before they could join Lars in Minnesota in 1930. With the depression, there was little work for Lars, so they ended up moving into a home in the Grygla-Gatzke area to farm. When the economy picked up they moved closer to town and Lars got more carpentry jobs. They joined the Lutheran Church and Dagny taught Sunday School and became active in the Ladies Aid as secretary.

In 1943, during World War II, Lars moved to Washington State to work in the shipyards. Dagny and the children joined him later. In 1944 they bought their first house, a farm with twenty acres. They lived here for nineteen years. Lars returned to carpentry and Dagny took up dress making. They made three trips back to Norway.