Green’s Dictionary of Slang

1. the penis.

1890–1904		Farmer & Henley Sl. and Its Analogues II 305/2: Dolly subs. [...] 3. (venery), — The penis.
1897		School Life in Paris 32: His ‘dolly’ [was] in a violent state of erection.
c.1900		A. Cairene Sixfold Sensuality 21: She at once jumped on top of him and guided his dolly into her milk-can [Ibid.] 74: The Abbé [...] would not withdraw his dolly until it was sick and vomited in Ella’s brown sugar basin.
1938		joke cited in G. Legman Rationale of the Dirty Joke (1972) I 102: I played with your dolly all night. It’s funny though. When I touched it, it sat up, then it stood up, then it threw up, then it fainted.
1972		B. Rodgers Queens’ Vernacular 49: the penis [...] dolly (fr the old joke where a father tells his inquisitive daughter that his penis is a doll. One day he awakes from a nap and sees his daughter crying. When asked what hapened, she replies that she was playing with the dolly [...] until it squirted her in the eye!

2. (N.Z. prison) a prison-made knife.

2001

D. Looser Boobslang [U. Canterbury D.Phil. thesis] 59/1: dolly n. 4 a knife, a shank.