Although somewhat sprawling, it is easy to feel the Gobi encroaching upon you. Walk in any direction for about 20 minutes and you are in the desert. Gurvan Saihan mountain range peers over the town from the west, and provides orientation.
With black smoke coming from the power station, and its dust roads, it's not an interesting town on its own, but it's a good place to stock up with food for excursions into the desert.
Although there is little to do in Dalanzadgad itself, it is the jumping off point for the three main tourist attractions in the Gobi: Yoliin Am (Vulture's Mouth), Khongoryn Els (Singing Dunes), and Bayanzag (Flaming Cliffs).
The new paved road was completed in September 2014 and there is a daily bus from Ulaanbaatar at 08:00 and 16:00 (about seven hours, 22.900T). It leaves at the bus station which you can reach by the Electrobus #4 in Ulaanbaatar and arrives at the North-East part of Dalanzadgad just opposite of the Mazaalai Ger Camp. The bus stops midway for about a half hour at a restaurant in Mandalgovi for lunch.
As of summer 2017, Hunnu Air and Aero Mongolia fly between Dalanzadgad and Ulaanbaatar with various frequencies. The small terminal is air-conditioned and has a WiFi sign, although no open WiFi spots were available as of June 2017. There are snack and souvenir shops. No regular public transportation is available from the airport to Dalanzadgad.
There will often be some drivers at the drop-off point for the buses.
Yollin Am (Vulture's Mouth) is one of the three attractions of the South Gobi. It is only an hour's drive outside of DZ, and a private car must be rented. A day trip (at the time of writing; 2012) costs about 80,000 T. The canyon itself is gorgeous, and most of the year is covered with ice. Temperatures within the canyon will be significantly colder than the surrounding desert. Wear warm clothes. During tourist season, horses can be ridden until the point where the canyon narrows and from there it is necessary to walk. After a mile or so of walking, the canyon will widen and a hike up a large yellow plain on the right leads to a good view of the desert.
Leave! The reason to go to Mongolia lies outside of town. Find a driver and go see the three sites.
There are a few good supermarkets in town (Maral and Tsogtlog). The following restaurants in town (as of April, 2013) are pretty good:
-Kimchi House: Certainly the best restaurant in town. Awesome authentic Korean food, Ulaanbaatar-quality restaurant. The Tagtoritan (spicy chicken soup) and Tagjorim (spicy chicken dish) are not to be missed. Kimchi House is on the second floor of a brick building across the street from the downtown Oyu Tolgoi office.
-Dalanzadgad Hotel: On the first floor of the DZ hotel is a restaurant called Bayanburd. It offers (relatively) good food. The beef curry and the chicken with pineapple are not bad.
-Khaan Uul Hotel and Suite: On the second floor is the most expensive restaurant in town, though certainly not the best. The cordon bleu isn't bad.
Also, practically ever hotel in town doubles as a bar/restaurant/karaoke place. Just walk in and get buuz, khooshor or tsuivan.
Gobi Sands Hotel, (Town center). Relatively new hotel in the heart of town. Singles from 79.000 per night, breakfast included. Stable and fast wifi. Very expensive restaurant on the top floor with great views. No English spoken. from 79.000T. edit
Dalanzadgad Hotel, (On the road between the center and the airport, just next to the square). This was the best place in town until Gobi Sands and Khaan Uul opened their doors. Still has one of the best restaurants in town. Little English spoken. 80.000T. edit
Khaan Uul Hotel and Suite, (Town center). The most expensive place to stay in town. It's also the place that mostly resembles Western standards, including their pricing... Has a restaurant and stable and fast wifi. English generally spoken. 100.000T. edit
As in most Mongolian towns, dangers and annoyances include: