After buying land near Hendrick's Lake for a sawmill, Charles Dealy of Dallas, Texas, president of Dealy Lumber Company, bought in 1900 land adjacent to the Trinity and Sabine Valley Railroad and on the Flanagan property. Here he built a very large planing mill to finish the lumber milled by the sawmill at the Lake. A two-mile tram road connected the mill at Hendrick's Lake to Flanagan. The American Lumberman noted in June of 1900 that the Dealy Lumber Company had built a sawmill (40,000-ft daily) at Hendrick's Lake and a planing mill (Hall & Brown equipment) at nearby Flanagan City. The lake opened from Sabine River, providing an opportunity for log booming down the river and into the lake to the mill. The lake would be used for pond purposes, able to hold 3,000,000 feet of timber. The company would specialize in “Panola county boxing,” clear finish, and heart stock.
The planer shed and buildings housed a 40-horsepower steam engine and boiler as well as a company residence (probably for Dealy or the mill manager), a commissary and tenant houses.