On 4 March 1903, she was part of the flotilla of "Holland"-class submarines that were undergoing a demonstration for Captain Reginald Bacon in Stokes Bay when a gasoline explosion occurred aboard "Holland 1". Along with the other "Holland"-class submarines, she was quickly reduced to the role of harbor defense and training. By 1909, at the time of fleet display in the Thames, the "Holland" class were no longer considered "seaworthy" by the media. In 1910, "Holland 5" ran aground off Fort Blockhouse, the location of HMS "Dolphin" and the home of the Royal Navy Submarine Service.