Dali has restaurant glut—so many have opened in the last few years that suffer the pains of competition. And however good the local cuisine may be, many backpackers gravitate toward the town's Western-style cafés. A number of these charming—and sometimes cheesy—places like Huguo Lu, also known as "Foreigner's Street". Huguo Lu establishments serve Western, Yunnan, Bai and Chinese dishes. Travelers recommend the vegetarian food at Buddha's Abode, the burritos and burgers at Cafe De Jack, the banana pancakes at the Old Wooden House, as well as the Sunshine Café, Salvador's Coffee House and Claire's Café.

Food is not the only draw to Huguo Lu, and many visitors just soak up the colorful atmosphere with a cup of tea or a beer. The Bai people pride themselves on several unique and tasty dishes. Try the locale cuisine at the Bailixiang Restaurant, Jingjing Snack House or any number of other Bai establishments around town. You should be sure to try a few of the following specialties: Dali Earthenware Pot Fish (Dali shaguo yu) a popular and hearty Bai dish made with magnolia petals, mushrooms, and slices of ham, pork, and chicken. The Dali version stars salted Er Hai, lake carp or "bowfish"gongyu), often complemented by bean curd, carrot slices and cabbage; The verdant pastures surrounding Dali produce rich and wonderful milk. Try Dengchuan Milk Fan (dengchuan rushan), a popular congealed yogurt-milk mix that can be fried or used to accent other dishes; Shaguoyu is a tasty lake fish dish, in which the fish is first fried and then simmered with vegetables. For good non-Bai Chinese at reasonable prices try the Apricot Flower Restaurant.