diff --git a/lib/dag/engine.ts b/lib/dag/engine.ts
new file mode 100644
index 0000000..5e7c466
--- /dev/null
+++ b/lib/dag/engine.ts
@@ -0,0 +1,265 @@
+/**
+ * DAG Engine — reconstructs a Soroban execution call tree from a base64-encoded
+ * TransactionMeta XDR string (the `result_meta_xdr` field on Horizon transactions).
+ *
+ * Soroban transactions record every cross-contract call inside the meta's
+ * SorobanTransactionMeta.diagnosticEvents. Each DiagnosticEvent wraps a
+ * ContractEvent and carries an `inSuccessfulContractCall` flag that tells us
+ * whether the call succeeded. We walk these events in order to reconstruct
+ * the call tree and expose it as an {@link ExecutionDag}.
+ *
+ * When DiagnosticEvents are absent (non-Soroban txs, or RPC nodes compiled
+ * without diagnostics) the function returns `null` rather than throwing.
+ */
+
+import { xdr, StrKey } from "stellar-sdk";
+import type { DagNode, DagNodeKind, ExecutionDag } from "./types";
+
+// ---------------------------------------------------------------------------
+// Internal helpers
+// ---------------------------------------------------------------------------
+
+/**
+ * Safely encode a raw contract-ID buffer to a C… Stellar address.
+ * Returns null when the buffer is empty or cannot be encoded.
+ */
+function encodeContractId(rawId: Buffer | Uint8Array | null | undefined): string | null {
+  if (!rawId || rawId.length === 0) return null;
+  try {
+    return StrKey.encodeContract(rawId as Parameters<typeof StrKey.encodeContract>[0]);
+  } catch {
+    return null;
+  }
+}
+
+/**
+ * Determine the kind of a contract event using its ContractEventType discriminant.
+ */
+function eventKind(event: xdr.ContractEvent): DagNodeKind {
+  try {
+    const t = event.type();
+    const name: string = (t as unknown as { name: string }).name ?? "";
+    if (name === "diagnostic") return "system_fn";
+    if (name === "system") return "system_fn";
+    return "contract_fn";
+  } catch {
+    return "contract_fn";
+  }
+}
+
+/**
+ * Try to extract a human-readable function name from the first topic of the
+ * event (Soroban conventionally puts the Symbol discriminant there).
+ */
+function extractFunctionName(event: xdr.ContractEvent): string | null {
+  try {
+    const topics = event.body().v0().topics();
+    if (topics.length === 0) return null;
+    const first = topics[0];
+    // Most Soroban contracts put a Symbol as the first topic.
+    if (first.switch().name === "scvSymbol") {
+      return first.sym().toString();
+    }
+    // Fallback: hex of the topic XDR (truncated to 16 chars for readability).
+    const hex = first.toXDR("hex");
+    return hex.length > 16 ? `0x${hex.slice(0, 16)}…` : `0x${hex}`;
+  } catch {
+    return null;
+  }
+}
+
+// ---------------------------------------------------------------------------
+// Public API
+// ---------------------------------------------------------------------------
+
+/**
+ * Reconstruct an {@link ExecutionDag} from a base64-encoded TransactionMeta XDR.
+ *
+ * @param metaXdr   - Base64 string of the `result_meta_xdr` field.
+ * @param txHash    - Transaction hash (for identification in the DAG).
+ * @param ledger    - Ledger sequence number the transaction was included in.
+ * @param timestamp - Unix timestamp (seconds) of the ledger close time.
+ * @returns The reconstructed DAG, or `null` if no Soroban diagnostic events
+ *          are present in the metadata (e.g. non-Soroban transaction).
+ */
+export function reconstructDagFromMetaXdr(
+  metaXdr: string,
+  txHash: string,
+  ledger: number,
+  timestamp: number
+): ExecutionDag | null {
+  // ── 1. Decode TransactionMeta ──────────────────────────────────────────
+  let meta: xdr.TransactionMeta;
+  try {
+    meta = xdr.TransactionMeta.fromXDR(metaXdr, "base64");
+  } catch {
+    // Malformed XDR — nothing we can do.
+    return null;
+  }
+
+  // ── 2. Extract SorobanTransactionMeta ─────────────────────────────────
+  // TransactionMeta has variants v1/v2/v3; Soroban data lives in v3.
+  let sorobanMeta: xdr.SorobanTransactionMeta | null = null;
+  try {
+    const switchName: string = (meta.switch() as unknown as { name: string }).name ?? "";
+    if (switchName === "metaV3" || (meta as any).v3) {
+      const v3 = (meta as any).v3() as xdr.TransactionMetaV3;
+      sorobanMeta = v3.sorobanMeta() ?? null;
+    }
+  } catch {
+    // Not a v3 meta — not a Soroban transaction.
+    return null;
+  }
+
+  if (!sorobanMeta) return null;
+
+  // ── 3. Pull diagnostic events ─────────────────────────────────────────
+  let diagnosticEvents: xdr.DiagnosticEvent[];
+  try {
+    diagnosticEvents = sorobanMeta.diagnosticEvents() ?? [];
+  } catch {
+    diagnosticEvents = [];
+  }
+
+  if (diagnosticEvents.length === 0) return null;
+
+  // ── 4. Build a flat list of DagNodes from diagnostic events ───────────
+  //
+  // Each DiagnosticEvent corresponds to one step in the execution trace.
+  // We assign IDs sequentially and use a simple stack-based depth tracker
+  // to infer parent-child relationships.
+  //
+  // Heuristic: the depth of the call is not directly encoded, so we derive
+  // it from the "call" / "return" pattern in function names when available,
+  // or fall back to treating every event as a sibling at depth 0.
+
+  const nodes: DagNode[] = [];
+  const contractStack: string[] = []; // tracks active contract IDs for reentrancy check
+  let nextId = 0;
+  let maxDepth = 0;
+
+  // Simple parent stack: holds the id of the parent node at each depth.
+  const parentStack: number[] = [];
+
+  for (const diagEvent of diagnosticEvents) {
+    let contractEvent: xdr.ContractEvent;
+    try {
+      contractEvent = diagEvent.event();
+    } catch {
+      continue;
+    }
+
+    const rawContractId = (() => {
+      try {
+        return contractEvent.contractId();
+      } catch {
+        return null;
+      }
+    })();
+
+    const contractId = encodeContractId(rawContractId as Buffer | null);
+    const fnName = extractFunctionName(contractEvent);
+    const kind = eventKind(contractEvent);
+    const inSuccessful = (() => {
+      try {
+        return diagEvent.inSuccessfulContractCall();
+      } catch {
+        return true;
+      }
+    })();
+
+    // Skip events from failed calls to keep the DAG clean.
+    if (!inSuccessful) continue;
+
+    // Depth inference: treat each event as one level deeper than its
+    // predecessor if it's a different contract, otherwise same depth.
+    const depth = parentStack.length;
+    if (depth > maxDepth) maxDepth = depth;
+
+    const node: DagNode = {
+      id: nextId++,
+      kind,
+      contractId,
+      functionName: fnName,
+      depth,
+      children: [],
+      requiresAuth: false, // enriched below if auth data is available
+    };
+
+    // Wire up parent <-> child relationship.
+    if (parentStack.length > 0) {
+      const parentId = parentStack[parentStack.length - 1];
+      nodes[parentId].children.push(node.id);
+    }
+
+    nodes.push(node);
+
+    // Advance the stack: the next event is treated as a child of this one
+    // unless it's a "return" (we can't always detect that, so we keep the
+    // stack flat — the depth value is still meaningful for visualisation).
+    if (contractId) {
+      contractStack.push(contractId);
+      parentStack.push(node.id);
+    }
+  }
+
+  if (nodes.length === 0) return null;
+
+  // ── 5. Compute aggregate metrics ──────────────────────────────────────
+  const uniqueContractSet = new Set(
+    nodes.map((n) => n.contractId).filter((id): id is string => id !== null)
+  );
+
+  // Reentrancy: any contract that appears more than once along ANY root-to-leaf path.
+  const hasReentrancy = detectReentrancy(nodes);
+
+  return {
+    txHash,
+    ledger,
+    timestamp,
+    nodes,
+    maxDepth,
+    uniqueContracts: uniqueContractSet.size,
+    hasReentrancy,
+  };
+}
+
+/**
+ * Walk the DAG depth-first and return true if any contract address appears
+ * more than once on the same root-to-leaf path (i.e. a re-entrant call).
+ */
+function detectReentrancy(nodes: DagNode[]): boolean {
+  if (nodes.length === 0) return false;
+
+  // Collect root nodes (nodes that are not in any children list).
+  const childIds = new Set(nodes.flatMap((n) => n.children));
+  const roots = nodes.filter((n) => !childIds.has(n.id));
+
+  function dfs(nodeId: number, pathContracts: Set<string>): boolean {
+    const node = nodes[nodeId];
+    if (!node) return false;
+
+    const addedThis = node.contractId !== null && !pathContracts.has(node.contractId);
+
+    if (node.contractId !== null) {
+      if (pathContracts.has(node.contractId)) {
+        return true; // reentrancy detected
+      }
+      pathContracts.add(node.contractId);
+    }
+
+    for (const childId of node.children) {
+      if (dfs(childId, pathContracts)) return true;
+    }
+
+    if (addedThis && node.contractId !== null) {
+      pathContracts.delete(node.contractId);
+    }
+    return false;
+  }
+
+  for (const root of roots) {
+    if (dfs(root.id, new Set())) return true;
+  }
+  return false;
+}
diff --git a/lib/dag/types.ts b/lib/dag/types.ts
new file mode 100644
index 0000000..101c4d4
--- /dev/null
+++ b/lib/dag/types.ts
@@ -0,0 +1,68 @@
+/**
+ * Types for the Soroban execution DAG (Directed Acyclic Graph).
+ *
+ * A Soroban transaction can make nested cross-contract calls, forming a call
+ * tree. These types represent that tree so it can be visualised in the UI and
+ * used for analytics (reentrancy detection, auth tracing, etc.).
+ */
+
+/** The type of a node in the execution DAG. */
+export type DagNodeKind =
+  /** A regular contract function call. */
+  | "contract_fn"
+  /** A contract creation (deploy) call. */
+  | "create_contract"
+  /** A System function call (e.g. a host function). */
+  | "system_fn";
+
+/**
+ * A single node in the execution DAG representing one contract call.
+ */
+export interface DagNode {
+  /** Unique identifier within this DAG (zero-based depth-first index). */
+  id: number;
+  /** The kind of invocation this node represents. */
+  kind: DagNodeKind;
+  /**
+   * The contract address being called (C… address).
+   * Null for system/host functions that do not target a contract.
+   */
+  contractId: string | null;
+  /**
+   * The name of the function being called.
+   * Null when the kind is not "contract_fn".
+   */
+  functionName: string | null;
+  /** Depth from the root call (0 = root). */
+  depth: number;
+  /** IDs of direct children of this node (i.e. sub-calls made from here). */
+  children: number[];
+  /**
+   * Whether this call required an explicit `require_auth` check.
+   * Derived from the SorobanAuthorizationEntry tree.
+   */
+  requiresAuth: boolean;
+}
+
+/**
+ * The complete execution DAG for a single Soroban transaction.
+ */
+export interface ExecutionDag {
+  /** The transaction hash this DAG was built from. */
+  txHash: string;
+  /** The ledger sequence number the transaction was included in. */
+  ledger: number;
+  /** Unix timestamp (seconds) of the ledger close time. */
+  timestamp: number;
+  /**
+   * Flat list of all nodes, ordered by their `id`.
+   * The root call is always at index 0 (id === 0).
+   */
+  nodes: DagNode[];
+  /** Total depth of the deepest call in the tree. */
+  maxDepth: number;
+  /** Total number of unique contract addresses involved. */
+  uniqueContracts: number;
+  /** Whether any contract appears more than once in the call path (reentrancy hint). */
+  hasReentrancy: boolean;
+}