Assistant coach Kingsley Jones says his side's defeat to the Ospreys in the Pro12 Welsh derby was a wake-up call for everybody at the Dragons.
The Men of Gwent suffered a 40-17 defeat by the Ospreys.
Flanker Justin Tipuric scored two of the Ospreys four tries, while Tom Prydie and Francisco Chaparro crossed for the Dragons.
"It was a really good barometer for us all...for coaches and players to see where we are," said Jones.
"I thought we performed quite well and there are lots of improvements in our defensive drives and the set-piece work is improving.
"But we are not putting teams under pressure and don't keep the ball long enough.
"We did have some first-phase ball, but we didn't make the most of it."
The Dragons were behind 16-10 at half-time, but were blown away by a clinical display by the Ospreys at Liberty Stadium.
The Ospreys are second in the Pro12, but level on points with leaders Munster, while the Dragons are in sixth place.
But Lyn Jones' side are yet to win away from home this season, but are unbeaten at Rodney Parade, where they have seen off Ulster, Scarlets and Zebre.
Jones says the Ospreys were well worth their win, but that he is looking for his side to bounce back when they face the champions Leinster in Newport on Friday.
"You have to give credit to the Ospreys," said Jones.
"I thought their first two tries were probably from individual genius.
"Matthew Morgan took advantage of a mismatch with an fantastic break and Tipuric...well, everything he touched was gold.
"The second half wasn't where we want to be and we have learnt a lot about ourselves and we have to put that right.
"We have Leinster next at home and that is an exciting challenge."