In the first of his two qualifying heats to determine grid positions for the 25-lap final, Smith took advantage of a good grid to come home second behind Nathan Jefferies (8P) with reigning 2NZ Ben Vaughan close behind in third place.
That's as good as it got for Vaughan, with mechanical issues ending his quest for a championship in the next heat.
Reigning 1NZ Shane Dewar started the first heat near the rear of the field, and made his way up to eighth.
Smith's group sat out the second heat, which was won by 3NZ Bayley Betts from Stratford, ahead of Shaun Dickie (10S), Stephen Hart (33K), Cameron Hurley (82S) and Lydia Dickinson (75S).
In the final qualifying heat Dewar got to the lead quickly, and showed why he was the current champion with a dominant display. Dickinson trailed in second place, followed by Elliot Heron (72H) and impressive rookie this season Campbell Stewart (97S).
From a rear grid, Smith made some vital late-race passes to finish in fifth.
That was enough to secure him a front row placing for the final, alongside Lydia Dickinson, with Dewar and Stewart, then Hurley and Jefferies filling the next two rows of the grid.
Tension was high as the race went green, and it was no surprise when the Speedway NZ officials deemed that several drivers had jumped the start, ordering the first of a number of restarts.
From the first restart, Dewar made a Hail Mary pass on the outside of Dickinson and Smith, but clouted the Turn One wall, almost rolling. His title defence was over.
Smith again had the best of the next restart, but this time it was Dickinson who overcooked it, spinning out.
Although she was able to continue, Dickinson could only finish seventh.
As the laps counted down, and through several more restarts, Smith held his nerve, controlling the pace of the race, while trying frantically to manage tyre wear.
His American Racer right rear tyre was almost bald by the end of the race, but he was aided by a couple of late cautions, which allowed him to cool the tyres.
However he kept his composure, and took the chequered flag less than half a second ahead of Stewart, with Betts coming home in third place.
In the WSSC Clubrooms afterwards, a jubilant Smith paid tribute to his sponsors, his family and his crew, especially his grandfather Bob Smith, himself a former two-time 3NZ in the Stockcar ranks in the 1980's.
The Smith family has played a significant role in the WSSC over the years with Bob being the current patron of the club, Bob and Dylan's grandmother Lynda both being Life Members, and Dylan's uncle Shaun Smith a current Wanganui Warrior in the Superstock ranks.
Smith's victory somewhat overshadowed the Oceanview 5000 for Youth Ministocks, which nonetheless provided some excellent racing.
Stratford driver Regan Ogle (46S) won the 14-and-under grade, heading off Cohen Wright (88R) with a late-race pass, with Izik Brosnahan (88W) coming home in third place.
In the 15-16 age grade, Wellington driver Levi Pou (16W) capped off a fine night, heading off Rotorua's Mitch Fabish (95R) and Terrence Dorrell (212R).
Fabish and Dorrell then combined to win the Interclub Challenge for Rotorua, ahead of Stratford and Palmerston North.
But it was Dylan Smith's night, and the former Youth Ministock champion added his name to the record books.
With so many Speedway New Zealand champions in recent years having got their start in the Youth class, it was fitting that so many young drivers were on hand to see Dylan Smith take the top step on the podium, and dream that one day, they may follow in his footsteps.
Racing takes a break next weekend with a huge contingent of Whanganui cars heading to Meeanee for the New Zealand Stockcar Championship, then another New Zealand title will be decided in January 22 and 23 as the Oval by the Ocean hosts the Tom Francis Builders New Zealand Production Saloon Championship.
