In 1993, New Zealand Rail Limited undertook a significant rebuilding of DX5362 into the first of what was to be a new sub-class, the DXR. DX5362 had been stored out of service at Hutt Workshops since early in 1989 suffering a cracked frame, and therefore was an ideal candidate for the rebuilding programme. Work began to fit the locomotive with a new GE 7-FDL diesel engine, upgraded traction motors with a ratio of 5.17 to the then-standard DX ratio of 4.55, and a new design of "Universal Cab" with a shorter low hood and more angular appearance. The use of 'R' (like the DBR class) denotes that the new locomotive was a rebuilt DX.