At the confluence of the Caheraderry and Dealagh Rivers, about 120 metres south-west of Derry Bridge, the structure now serves as an outhouse, but the rotten remains of a water wheel, together with the millrace and sluice gate, make clear that this was once a working mill driven by moving water. What makes the site particularly curious is the shift in what it was recorded as doing: the Ordnance Survey six-inch map of 1840 labels it 'Cloth Mills', suggesting textile production, while the equivalent map from 1916 calls it 'Derry Mills (Corn)', pointing to grain milling. Whether the function genuinely changed over those decades, or whether the earlier label was simply imprecise, is not recorded.

The mill's history extends considerably further back than either map. The Down Survey, a remarkable mid-seventeenth-century cartographic project that mapped landholdings across Ireland between 1655 and 1658, marks a water mill on the east side of the river in the nearby townland of Ballingaddy, close to this site. That the same general location was already associated with milling at that date suggests a long continuity of use tied to the reliable confluence of two watercourses. The building that stands today is a rectangular two-storey structure, south-facing, measuring roughly six metres east to west and five and a half metres north to south, with a slate roof and three two-over-two sash windows across its façade. The millrace, a channel cut to direct river water onto the wheel and harness its energy, remains visible, as does the sluice gate used to control the water flow, though the wheel itself has long since begun to decay into the ground around it.