how did dally die ? how did ponyboy know that this was what dally wanted ? what did ponyboy think about the way dally died ?

Just after Ponyboy breaks the news that Johnny has died, he also reports that Dallas has run off, since he couldn't take it. Ponyboy starts shaking; his heart is beating loudly and he feels as if he will fall over. Then Dally calls from a payphone, saying he's just robbed a grocery store and is running from the cops. As the gang rushes out of the house, Ponyboy feels as if he is about to faint.

They arrive at the vacant lot just as Dally does, from the opposite direction. The police pull up in their cars and jump out. Dally pulls his gun out and raises it; the policemen fire at him, killing him. Ponyboy realizes that Dally had wanted them to kill him. Dally has died "violent and young and desperate," but "he died gallant."

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Dally plans for the police to kill him; Ponyboy knows he's only bluffing when he pulls out his gun, but the goal is for the police to shoot back. His death makes Ponyboy realize that although Johnny appears a hero while Dally appears a hoodlum, Dally was heroic, too. The appearance of the whole situation is much like the Greasers' appearance in general: misleading. Ponyboy links Johnny and Dally's deaths to Gone with the Wind, as he considers how they "died gallant."