<b><i>Introduction:</i></b> Intramedullary thoracic dermoid cysts are rare lesions that are associated with dermal sinus tracts (DSTs). Current recommendations advocate for imaging-based screening of suspected DSTs shortly after birth to exclude associated inclusion lesions. <b><i>Case Presentation:</i></b> A 6-year-old male child presented with a 2-week history of progressive ataxia, lower limb weakness, and hyperreflexia. He was suspected to have a thoracic DST at birth, though initial screening ultrasound was negative for an inclusion lesion or intradural tract. On representation, MRI demonstrated a 3.9-cm intramedullary thoracic dermoid cyst causing significant spinal cord compression. Intraoperatively, a DST extending intradurally was found. The associated dermoid cyst was removed via intracapsular resection. <b><i>Conclusions:</i></b> Whilst dermoid cysts are presumed to progressively develop from DSTs, to our knowledge, this is the first case in English literature documenting a thoracic spinal cord intramedullary dermoid cyst following a negative screening ultrasound for a suspected DST. We use this case to highlight the false-negative rates associated with postnatal screening and advocate for early neurosurgical referral of suspected DSTs, regardless of imaging findings.