The Kirkcaldy swimmer’s time of 56.73 seconds set a new national mark, beating Dawson’s own record of 57.03sec which she had set in the semi-finals.
The Scot was 0.28sec off a medal. Britain’s Georgia Davies (56.45) won bronze behind winner Katinka Hosszu of Hungary (55.54) and silver medallist Kylie Masse of Canada (56.24).
Meanwhile, Duncan Scott, the double Olympic relay medallist, will be back in home waters this weekend when he heads the cast at the Scottish Short Course Championships at the Royal Commonwealth pool in Edinburgh.
The 19-year-old has had a wonderful few years, making his Olympic debut in Rio just a year after leaving Strathallan School.
At the start of the next Olympic cycle, Scott, who also won a relay medal for Scotland at the 2014 Commonwealth Games, is now moving into the experienced category.
And with Robbie Renwick having announced his retirement this week and Hannah Miley, Stephen Milne and Ross Murdoch all away at the World Championships, Scott will be one of the next wave of top Scots on show over the next three days.
Camilla Hattersley and Craig Benson, who has dropped from the GB funding list, are the other Rio Scots competing at the Commonwealth.
Scott opens his busy programme today with a double header in the 100m butterfly and the 400m freestyle. Hattersley is in action in her favourite 800m freestyle and Benson begins his bid in the breaststroke in the 50m event.