Bells is on U.S. Highway 82 ten miles east of Sherman in east central Grayson County. Daniel Dugan settled in the area in 1835. Community development, however, did not occur until the early 1870s with the arrival of the Texas and Pacific and Missouri, Kansas and Texas railways. The community was called Dugansville, for the local pioneer family, from 1871 to 1878, and was renamed Bells (or Bell's), perhaps in reference to the area churches, in 1879. In the 1870s the community had a post office, nine stores, a mill, a cotton gin, and Corneilison School. The community grew up south of the railroad, and incorporated in 1881. By 1900 the community had 400 residents, twenty businesses, two schools, a number of churches, and a weekly newspaper, the North Texas Courant. By the mid-1920s the number of residents had grown to just over 600; businesses numbered thirty, including a bank. The community supported a high school and a grade school. The depression and World War II slowed the growth. Beginning in the 1950s, however, a steady increase in population resumed. In 1955 the population was just over 600; in 1990 it was 962, and in 2000 it was 1,190.