Czech Ondrej Tunka - who won last year's Whitewater XL title in Auckland - grabbed a shock gold medal in 91.84s after Slovenia's Peter Kauzer received a late penalty, with Tunka's compatriot Vit Prindis finishing just 0.02sbehind for silver.
Olympic champion Joe Clarke of Britain was a spot ahead of Dawson in sixth.
Dawson believes the work he and coach Campbell Walsh have put in this season in Pau has paid dividends.
"The course was really good and we spent a lot of time here and know it well," he said.
''If you're technically good, it's going to be great for you as a paddler but in saying that, it's always really tight racing so you've just got to put it all on the line."
This result has further rejuvenated the New Zealand veteran, who turns 31 next month but is showing no sign of slowing down.
"It's been a wicked off-season since the Olympics - going to Pakistan and doing a few extreme kayaking missions around the world is something I've wanted to do for a few years.
''To be able to do that and come back and compete with these guys at a world champs and step it up is pretty cool."
Meanwhile, two penalty touches meant Rio Olympic silver medallist Luuka Jones finished out of the finals in her new C1 division, finishing in 124.82s, just 2.17s outside the top-10.
Great Britain's Mallory Franklin squeaked through in 10th spot but turned it around in the final with a dream run to take gold.
Jones is back in action late tonight in the K1 semifinals, with Jones, Dawson and Callum Gilbert lining up in Sunday's extreme slalom competition.