The following information is supplied from the website Sheephaven Bay Website (2100.accubookwebsites.com)
Dunfanaghy (translates as Fort of Fionnachaidh). Sidhe Fionnachaidh was the home of Lir, God of the Sea, whose four children were turned into swans. I like to fancy that the perfectly conical Cnoc-a-sidhe (meaning fairy hill) atop Horn Head might have been Lir's home. After all, the surrounding area is rich in Celtic and pre-Celtic, particularly Tuatha de Danann (meaning people of the Godess Danu)folklore. Tory Island was the home of Balor of the Evil Eye, Dunlewy was associated with Lugh, the Sun God, and Pollagoill and Rosgoill are named after the fierce Celtic warrior Goll Mac Morna (who lost an eye in battle with Fionn's father), friend and deputy to Fionn Mac Cumhaill, leader of the legendary Fianna.
Dunfanaghy is one of the best-known, scenic, holiday destinations on the north west coast. It is situated on the southern shore of a shallow sandy inlet on the western side of Sheephaven (originally Ship Haven) Bay, and is sheltered by the magnificent bulk of Horn Head to the north. It has managed to preserve its special character and the vast majority of its architectural, historical, archaeological and scenic beauty. These, combined with a varied and unique array of natural and purpose-built amenities, have contributed to its long-term popularity.
The village was a thriving commercial centre up to the end of the 19th century due to the influence of the local landlords, the Stewarts of Ards. The provision of supplies to a Scottish fishing fleet that operated locally and used Dunfanaghy as their base also added to the commerce prosperity of the area.
This same fishing fleet suffered a major disaster in 1818 when a north-westerly storm swamped many boats at their nets. Those who ran for shelter to Dunfanaghy were smashed to pieces as they tried to negotiate the sandbar to the north east of the inlet. Only one of the 100 boats made a safe return. The crews of all the other boats were lost and their bodies washed up in the harbour and along the beaches next morning. It is said that a 92 year-old Scottish woman who lost three sons and several grandsons in the disaster put a curse on the bay, "that it would never have fish again," which was the case for years afterwards.
In 1917 another north-westerly storm, lasting several days, dislodged the sand in the dunes to the west which had been made unstable after to over-cropping of rushy marn grass due to a shortage of animal bedding during the First World War. The sand was blown across the middle of the inlet, completely silted it up. This marked the end of Dunfanaghy as a commercial port and a side-effect was the formation of New Lake, which is now a fresh-water lake with a very special eco-system. The lake occupies twice the area of the salt marsh that preceded it and it has become home to a variety of duck, geese and swans, but the indigenous population is significantly increased from October to April when many visiting species arrive from Greenland, Canada and Iceland.
On the southwest shore of New Lake, along the N.56, is Corcreggan Mill, which was established in 1789 and still has its water wheel and machinery intact. The Mill served the domestic and farm needs of a wide area, including the islands. It milled corn and grain, until it ceased production around 1965. There are plans to restore it as a visitor attraction and an Arts and Cultural centre. Also on this property is the local tourist hostel, part of which is housed in an old mahogany railway carriage and station.
The Mill House has also been restored as further tourist accommodation and a residential retreat centre with a large auditorium for poetry/music recitals, workshops and public meetings. An ancient history describes this hollow as "an important pre-Celtic site dedicated to the Goddess Danu, and the energy centre of the whole north west of Ireland" (Marko Pogacnik)
In and around the village there are excellent hotels, pubs, restaurants, B&Bs, craft, coffee and grocery shops. The Gallery, to the south of the village, which was formerly the Fever Hospital, has a wide range of paintings, artist's materials, antiques and crafts for sale, and next door is the restored Workhouse which has a permanent exhibition on the Great Famine and a coffee shop.
To the north of the village, Horn Head offers wonderful panoramic views of the Muckish to Errigal mountain range, Bloody Foreland, Tory and Inishbofin Islands, Malin Head, Melmore Head, Downings, Ards Forest Park, Sessiagh and New Lakes, Killyhoey Strand and Portnablagh Harbour. The 600 foot cliffs at the north point were described by Robert Lloyd Preager in his book The Way that I Went, as "perhaps the finest headland in Ireland." The cliffs are noted for a large variety of sea birds and are a constant attraction for individuals and school groups examining its geological sites, some of which are of world renowned importance. There are also 175, recorded archaeological sites within a five-mile radius of the village. To the east of the village are Portnablagh, Breaghy Head, Marble Hill and Ards Forest Park and Friary.