He was on track for a dream final run too, until a bubble of water pushed him outside the 15th gate; he lost time there, then clipped the subsequent gate to pick up a 2sec time penalty and drop him to 98.80secs and seventh overall.
Ahead of him, Czech Ondrej Tunka - who won last year's Whitewater XL title in Auckland - grabbed a shock gold medal in 91.84 after Slovenia's Peter Kauzer received a late penalty, with Tunka's compatriot Vit Prindis finishing just 0.02 seconds behind for silver.
Olympic champion Joe Clarke (Great Britain) was a spot ahead of Dawson in sixth.
Dawson believes the work he and coach Campbell Walsh have put in this season in Pau has paid dividends.
"The course was really good and we spent a lot of time here and know it well. If you're technically good, it's going to be great for you as a paddler but in saying that, it's always really tight racing so you've just got to put it all on the line."
This result has further rejuvenated the New Zealand veteran, who turns 31 next month but is showing no sign of slowing down.
"It's been a wicked off season since the Olympics - going to Pakistan and doing a few extreme kayaking missions around the world is something I've wanted to do for a few years. To be able to do that and come back and compete with these guys at a world champs and step it up is pretty cool."
Meanwhile, two penalty touches meant Luuka Jones (Tauranga) finished out of the finals in her new C1 division, finishing in 124.82secs, just 2.17secs outside the top-10.
Great Britain's Mallory Franklin squeaked through in 10th spot but turned it around in the final with a dream run to take gold, posting 109.09 and watching three-time world champion, Australia's Jessica Fox, run into trouble with three gate touches.
Jones is back in action Saturday night in the K1 semifinals, with Jones, Dawson and Callum Gilbert lining up Sunday's extreme slalom competition.
