She was took the Labour seat from Gordon Langlands, who retired.
Her late father, John, was a former council leader before going on to become MP for Glenrothes.
Ms MacDougall finished with 1730 first preference votes, just five behind returning SNP councillor Lesley Backhouse.
She said: “I was brought up here and it feels very, very special to win this seat.”
The ward also saw the comfortable return of Lesley Backhouse for the SNP on 1735 first preference votes, and Tory Kathleen Leslie on 1239.
There was a big shock in Kirkcaldy North where Labour saw the seat formerly held by long-serving Neil Crooks – who was the Kirkcaldy area convener – go to the Tories.
James Leslie pulled off something of a shock result by polling 789 first preference votes to bag one of the ward’s three seats.
Labour had hoped Ryan Smart would follow in Mr Crooks’ footsteps but he polled just 203.
Both David Ross, Labour’s co-leader of the council, and Carol Lindsay from the SNP eased home for another term; Ross polling 1804 and Lindsay 1661.
Mr Ross reflected on the picture so far which has Labour behind the SNP in terms of seats declared – but with a long way to go before the outcome is clear.
He said: “It is disappointing to see that we have lost some very good councillors, but we have taken a seat in Dalgety Bay.
"My impression is our share of the vote has gone up but the vagaries of the voting system has cost us a couple of seats.
"There will be a strong Labour presence at Fife House and we will do all we can to protect services.”
In Kirkcaldy Central, Zoe Hisbent (SNP) lost her seat after finishing fourth behind Labour’s Alistair Cameron and Judy Hamilton whop were both returned along with the SNP’s Blair Allan who topped the poll with 1005 first preference votes.
In Kirkcaldy East, the SNP made a gain, taking the seat previously held by Tory, Richard Watt.
His poll of 496 was well below that of Nicola Patrick’s 868.
Ian Cameron was returned for Labour on 1313, while Rod Kavanagh eased home for the SNP with 924.\
In Lochgelly, Cardenden and Benarty, voters opted for the status quo with all four sitting councillors returned.
The SNP duo of Rosemary Lewald and Lea McLelland were joined back at Fife House by Labour’s Mary Lockhart and Linda Erskine.
Lockhart topped the first preference vote poll with 1230, just ahead of Liewald on 1173, but turnout in the ward was just 35.7%