diff --git a/src/analyzer.rs b/src/analyzer.rs
index 7448274..8557b4c 100644
--- a/src/analyzer.rs
+++ b/src/analyzer.rs
@@ -3,7 +3,7 @@ use memchr::memchr;
 use crate::action::Action;
 use crate::comment::Comment;
 use crate::error::SqlfmtError;
-use crate::lexer::{self, LexState};
+use crate::lexer::{self, scan_dollar_string, LexState};
 use crate::line::Line;
 use crate::node::{Node, NodeIndex};
 use crate::node_manager::NodeManager;
@@ -797,6 +797,13 @@ impl Analyzer {
                 i = skip_jinja_block(bytes, i);
                 continue;
             }
+            if bytes[i] == b'$' {
+                let ds_len = scan_dollar_string(&bytes[i..]);
+                if ds_len > 0 {
+                    i += ds_len;
+                    continue;
+                }
+            }
             if i + 1 < len && bytes[i] == b'/' && bytes[i + 1] == b'*' {
                 in_comment = true;
                 i += 2;
diff --git a/src/lexer.rs b/src/lexer.rs
index f19c0b9..c69c2a4 100644
--- a/src/lexer.rs
+++ b/src/lexer.rs
@@ -394,7 +394,7 @@ fn scan_block_comment(bytes: &[u8]) -> usize {
 }
 
 /// Scan a dollar-quoted string ($tag$...$tag$). `bytes` starts at `$`.
-fn scan_dollar_string(bytes: &[u8]) -> usize {
+pub(crate) fn scan_dollar_string(bytes: &[u8]) -> usize {
     // Find the end of the opening tag
     let mut tag_end = 1;
     while tag_end < bytes.len()
diff --git a/tests/data/unformatted/221_dbt_config_dollar_quoted.sql b/tests/data/unformatted/221_dbt_config_dollar_quoted.sql
new file mode 100644
index 0000000..d8d0a1e
--- /dev/null
+++ b/tests/data/unformatted/221_dbt_config_dollar_quoted.sql
@@ -0,0 +1,64 @@
+-- disable-parser
+{{
+       config(
+              materialized='incremental',
+              transient=false,
+              unique_key='event_id',
+              meta={'final_schema': 'analytics'},
+              incremental_strategy='merge',
+              on_schema_change='sync_all_columns',
+              full_refresh=false,
+       )
+}}
+{% set app_comment_pattern = "'-- App Context'" %}
+SELECT e.event_id AS event_id
+     , e.event_type AS event_type
+     , e.user_id AS user_id
+     , e.created_at AS created_at
+     , CASE
+         WHEN e.source = 'api' THEN 'api'
+         WHEN e.source = 'web' THEN 'web'
+         ELSE 'other'
+          END AS event_source
+     , try_parse_json(regexp_substr(e.payload, $$/\*\s*({.*"app":.*})\s*\*/$$, 1, 1, 'ie')) as event_meta
+     , e.duration_ms AS duration_ms
+  FROM {{ source('app', 'events') }} AS e
+  LEFT JOIN {{ ref('dim_users') }} AS u
+    ON e.user_id = u.user_id
+{% if is_incremental() %}
+ WHERE e.created_at > (
+       SELECT DATEADD(DAY, -2, MAX(created_at))
+         FROM {{ this }}
+       )
+{% endif %}
+)))))__SQLFMT_OUTPUT__(((((
+-- disable-parser
+{{
+       config(
+              materialized='incremental',
+              transient=false,
+              unique_key='event_id',
+              meta={'final_schema': 'analytics'},
+              incremental_strategy='merge',
+              on_schema_change='sync_all_columns',
+              full_refresh=false,
+       )
+}}
+{% set app_comment_pattern = "'-- App Context'" %}
+select
+    e.event_id as event_id,
+    e.event_type as event_type,
+    e.user_id as user_id,
+    e.created_at as created_at,
+    case
+        when e.source = 'api' then 'api' when e.source = 'web' then 'web' else 'other'
+    end as event_source,
+    try_parse_json(
+        regexp_substr(e.payload, $$/\*\s*({.*"app":.*})\s*\*/$$, 1, 1, 'ie')
+    ) as event_meta,
+    e.duration_ms as duration_ms
+from {{ source("app", "events") }} as e
+left join {{ ref("dim_users") }} as u on e.user_id = u.user_id
+{% if is_incremental() %}
+    where e.created_at > (select dateadd(day, -2, max(created_at)) from {{ this }})
+{% endif %}
diff --git a/tests/golden_test.rs b/tests/golden_test.rs
index 1d07f40..bad0137 100644
--- a/tests/golden_test.rs
+++ b/tests/golden_test.rs
@@ -459,6 +459,10 @@ golden_test_clickhouse!(
     golden_unformatted_220_clickhouse_joins,
     "tests/data/unformatted/220_clickhouse_joins.sql"
 );
+golden_test!(
+    golden_unformatted_221_dbt_config_dollar_quoted,
+    "tests/data/unformatted/221_dbt_config_dollar_quoted.sql"
+);
 
 // =============================================================================
 // Unformatted golden tests — 300-series (Jinja formatting)