diff --git a/docker/lnd/Dockerfile b/dev.Dockerfile
similarity index 100%
rename from docker/lnd/Dockerfile
rename to dev.Dockerfile
diff --git a/docker/docker-compose.ltc.yml b/docker/docker-compose.ltc.yml
index c3bbd3dc..5bf9c323 100644
--- a/docker/docker-compose.ltc.yml
+++ b/docker/docker-compose.ltc.yml
@@ -24,7 +24,7 @@ services:
       container_name: lnd_ltc
       build:
         context: ../
-        dockerfile: docker/lnd/Dockerfile
+        dockerfile: dev.Dockerfile
       environment:
         - RPCUSER
         - RPCPASS
diff --git a/docker/docker-compose.yml b/docker/docker-compose.yml
index f13a400f..61cd58a5 100644
--- a/docker/docker-compose.yml
+++ b/docker/docker-compose.yml
@@ -24,7 +24,7 @@ services:
       container_name: lnd
       build:
         context: ../
-        dockerfile: docker/lnd/Dockerfile
+        dockerfile: dev.Dockerfile
       environment:
         - RPCUSER
         - RPCPASS
diff --git a/docs/DOCKER.md b/docs/DOCKER.md
index a793b914..700f5677 100644
--- a/docs/DOCKER.md
+++ b/docs/DOCKER.md
@@ -1,9 +1,25 @@
 # Docker Instructions
 
+There are two flavors of Dockerfiles available:
+ - `Dockerfile`: Used for production builds. Checks out the source code from
+   GitHub during build. The build argument `--build-arg checkout=v0.x.x-beta`
+   can be used to specify what git tag or commit to check out before building.
+ - `dev.Dockerfile` Used for development or testing builds. Uses the local code
+   when building and allows local changes to be tested more easily.
+
 ## Development/testing
 
-For development or testing, or to spin up a `btcd` backend alongside `lnd`,
-check out the documentation at [docker/README.md](../docker/README.md).
+To build a standalone development image from the local source directory, use the
+following command:
+
+```
+$ docker build --tag=myrepository/lnd-dev -f dev.Dockerfile .
+```
+
+There is also a `docker-compose` setup available for development or testing that
+spins up a `btcd` backend alongside `lnd`. Check out the documentation at
+[docker/README.md](../docker/README.md) to learn more about how to use that
+setup to create a small local Lightning Network.
 
 ## Production