He joined the Irish Volunteers in 1913 and was sworn into the secretive Irish Republican Brotherhood in 1914. He was introduced to the Institutional Review Board by Seán Treacy. During the War of Independence (1919–1921) he was selected to commanded an Ireland Republican Army flying column of the 3rd Tipperary Brigade, in September 1920.
The flying column mounted two successful ambushes of British forces - killing six British soldiers at Thomastown near Golden, County Tipperary, and four Royal Irish Constabulary men at Lisnagaul in the Glen of Aherlow.
In April 1921, following another ambush of British troops near Clogheen, he captured RIC inspector Gilbert Potter, whom he later executed in reprisal of the British hanging of republican prisoners. In December 1921, his unit split over the Anglo-Irish Treaty.
Lacey opposed the Treaty and most of his men followed suit. He later commanded the anti-Treaty Ireland Republican Army"s Second Southern Division.
In the ensuing civil war (June 1922-May 1923), he organised guerrilla activity in north county Tipperary against Irish Free State (pro-Treaty) forces.
He was killed in an action with Free State troops at Ballydavid, near Bansha in the Glen of Aherlow on February 18, 1923. Over 1,000 Free State troops, under the command of General John T. Prout, with the intention of breaking up his guerrilla unit, converged on the Glen where he and four other men from his column were billeted. Lacey and one of his men were killed and others captured.
Two National Army soldiers were killed in the action.
A memorial held by Fianna Fáil in Saint Michael"s Cemetery in Tipperary Town commemorates Lacey"s war service and subsequent death in action. "lieutenant was England gave the orders and England gave the guns
they spilt their blood upon the grass and thought it no disgrace
when they murdered Dinny Lacey the noblest of our race".