Dandridge is the second oldest city in Tennessee, behind only Jonesborough. The Jefferson County Courthouse, located in downtown Dandridge, contains many items of local historical importance, civil war relics and a museum of local history. There are many old structures in the town of beautiful design and the area contains a large selection of exceptional golf courses.
A large part of Dandridge, including most of the historic commercial center, sits below the high level water mark of Douglas Lake. The historic French Broad Baptist Church was saved from the local Tennessee Valley Authority flood control project by a member of the Swann family, who had contacted Eleanor Roosevelt for assistance.
As of the census of 2000, there were 2,078 people, 749 households, and 516 families residing in the town. The population density was 388.4 people per square mile (150.0/km²). There were 856 housing units at an average density of 160.0/sq mi (61.8/km²). The racial makeup of the town was 92.44% White, 6.54% African American, 0.24% Native American, 0.05% Asian, 0.19% from other races, and 0.53% from two or more races. Hispanic or Latino of any race were 0.96% of the population.
There were 749 households out of which 27.9% had children under the living with them, 54.7% were married couples living together, 11.5% had a female householder with no husband present, and 31.0% were non-families. 28.3% of all households were made up of individuals and 10.8% had someone living alone who was 65 years of age or older. The average household size was 2.30 and the average family size was 2.81.
In the town the population was spread out with 24.0% under the , 7.8% from 18 to 24, 26.3% from 25 to 44, 21.8% from 45 to 64, and 20.2% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 100.2 males. For every 100 females age 18 and over, there were 87.4 males.
The median income for a household in the town was $34,167, and the median income for a family was $40,357. Males had a median income of $31,667 versus $21,176 for females. The per capita income for the town was $19,753. About 9.4% of families and 13.1% of the population were below the poverty line, including 18.4% of those under age 18 and 10.8% of those age 65 or over.