A Blog From Behind the Trenches

While Opera Dragonfly is indeed a Web application which is accessed from an online server the first time you use it, it will actually be cached for offline use. In other words, we will not be spying on you while you are debugging your code

Here's a brief description from the Opera Dragonfly product page:

Opera Dragonfly is a new breed of hybrid application. Part desktop application, part web application, it resides in local persistent storage, yet instantly updates when a new version is released – just like your favorite web sites. You never have to check for updates or install a new version.

You should also be able to install it on your computer manually by downloading the source, unzipping it somewhere (such as C:\Dragonfly), and then pointing DeveloperToolsURL to the new location (in this case, file://localhost/c:/Dragonfly/client.xml).

Note that Opera Dragonfly is far from feature complete, as you will soon figure out if you read the product description and documentation. A lot of nice features, such as HTTP or XHR logging, or docking the UI, is not yet available, but is already planned for a future release.

Remember, this is just the first alpha!