In 1927 Dreyer returned to sea as commander of the Battlecruiser Squadron, flying his flag in . In 1929 he became a vice admiral and the following year became Deputy Chief of the Naval Staff. He had previously entertained hopes of becoming the commander of the Atlantic Fleet after his tenure at the Admiralty. However, the tainting by association of the Board of which he was part by the Invergordon Mutiny in 1931, with the consequent effect on that fleet, meant that Dreyer was destined never to command it.