On July 26, 1994, Dineen returned to the New York Islanders, as a free agent. Due to the 1994–95 NHL lockout, Dineen spent a majority of the season with the Islanders IHL affiliate, the Denver Grizzlies, where he was named captain of the team. In 68 games with Denver, Dineen scored five goals and 32 points. In 17 playoff games, Dineen had a goal and seven points, as Denver won the Turner Cup. Dineen did play in nine games with the Islanders during 1994–95, earning no points.