The 25 year old's reasons for leaving have not yet been revealed, and manager Darren Edmondson is keen to move on from the incident.
"I'm not going to go into the reasons behind Dan leaving the squad. What was said between him and me will stay that way. Things just didn't work out but that's football and Dan wanted to go. It was a mutual decision in the end."
"There's no doubt that Dan will find himself another club and we will carry on."
Dillon was sent off twice in his short spell with the Reds, the second dismissal coming in the last match against league leaders Hyde on Saturday.
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