The£2m operation opens for business this week in offices at Sony's Pencoed Technology Park near Bridgend and will focus initially on handling digital intermediates and HD deliverables for feature films as well as film restoration work.
Digital Dragon managing director Tony Ray, a former senior creative at Quantel, told Broadcastthat his new facility would be installing state-of-the-art scanning equipment from Arri and editing and colouring kit from Quantel and Da Vinci.
Ray is joined at Digital Dragon by former Quantel staffers Phil Green as creative director and Paul Wright as engineering director.
Although the company will initially be based at Pencoed, the plan is to move to the Dragon International Studios complex, currently under construction on a 317-acre site between Cardiff and Bridgend, within two years.
The development is expected to be a magnet for post-production businesses, which will be able to take advantage of business development grants. Cardiff-based Barcud Derwen, the largest facility outside London with 170 staff, is already planning to set up shop at the site.
Dubbed "Valleywood", the first phase of the studio development - which will include high spec sound stages and TV studios - is due for completion this February.
Managing director Bryn Roberts confirmed that he had already had discussions with Dragon International Studios managing director Terry Clegg. "It's an exciting development and will bring in plenty of money to the South Wales area," said Roberts.
The complex is backed by actor and film producer Lord Attenborough, the studios' executive chairman. The aim is to turn the complex, which began construction last month, into a thriving centre for UK film and television production to rival home counties studio complexes such as Pinewood-Shepperton.
Valleywood, which has European Objective 1 funding status, is expected to create 1,700 jobs.