His semi-final was interrupted when Canada's Samuel Girard broke his blades before the final lap with Dajing unchallenged and in charge.
Girard pushed the Chinese four-time world champion close in the restart but Dajing came through on top again by the inch of a blade.
Dajing was denied gold in this event by Korean-born Russian Viktor Ahn four years ago in Sochi but Ahn was barred from competing in PyeongChang, making Dajing the favourite for gold.
He left nothing to chance in the final as he blew his competition away by breaking the world record again, lowering it to 39.58 seconds to win his first Olympic title in the most dominant style with Korean athletes Daeheon Hwang and Hyojun Lim completing the podium for silver and bronze respectively.
In the women's 1000m event, Dutch short track skater Suzanne Schulting upgraded her bronze medal from Sochi as she was crowned the new Olympic champion after Korean favourites Minjeong Choi and Sukhee Kim crashed out after bumping into each other on the final sprint.
Schulting broke down in tears and hugged her fellow team mates when she crossed the line first ahead of Canada's Kim Boutin and Italy's 500m champion Arianna Fontana.
And in the men's 5000m relay, Hungary edged out China in a tense ending at the finish line with an Olympic record of 6:31.9 with Canada following for the bronze medal.
Shaolin Sandor Liu of Hungary embraces his girlfriend Elise Christie of Great Britain following the Short Track Skating Men's 5000m Relay Final A on day thirteen of the PyeongChang 2018 Winter Olympic Games at Gangneung Ice Arena on February 22, 2018 in G
Image credit: Getty Images
Shaolin Sandor Liu was the first man to the finish for Hungary and he leaped over the track barrier to hug his girlfriend, Britain's Elise Christie, in ecstatic celebrations to round off a dramatic day of short track speed skating.