The protest comes days after a truck plowed into crowds at a Berlin Christmas market, killing 12. The perpetrator of the attack was Tunisian.
Chanting "criminal foreigners" and "national socialism now," the group marched through the area of Kreuzviertel, described as an expensive residential zone. The march finished in front of Dortmund police headquarters, according to News.com.au.
"We demonstrate today because we, as young Germans, want to show it is unfair how the politics, the police and the government proceed against right-wing young people while terrorists in Berlin strike terror or while a young girl in Freiburg is murdered, said Michael Brueck, deputy chairman of the party's North-Rhein Westphalia branch, News.com.au reports.
"We want to point out that in Germany a double standard prevails on the handling of political groups and our opinion is oppressed."
A week earlier, a neo-Nazi group briefly occupied a church tower in the same town, hanging a banner from a parapet, setting off flares and shouting slogans at shoppers in a Christmas market below.
Die Rechte and the far-right National Democratic Party each hold one seat in Dortmund's city council, Deutsche Welle reports.