Gerald Green and Marcus Morris scored 16 points apiece to help the Suns win their fourth consecutive game.
Roy Hibbert had 26 points and David West added 18 for the Pacers (35-10).
Morris hit a 3-pointer with 2:58 remaining and Dragic dunked to give the Suns (28-18) a 100-94 lead with 44 seconds left.
The Suns scored 66 points in the first half – the most given up by the Pacers in a half this season since the Suns scored 62 on Indiana a week ago.
ALL-STAR RESERVES: The Portland Trail Blazers and Houston Rockets each had two players picked as reserves for the NBA All-Star game, while the Indiana Pacers settled for just Roy Hibbert.
LaMarcus Aldridge and Damian Lillard made it from the Trail Blazers. Dwight Howard was chosen along with Houston teammate James Harden.
Chris Paul, Tony Parker and Dirk Nowitzki round out the West reserves for the Feb. 16 game in New Orleans.
The other East reserves are: Miami’s Chris Bosh, Washington’s John Wall, Toronto’s DeMar DeRozan, Brooklyn’s Joe Johnson, Chicago’s Joakim Noah and Atlanta’s Paul Millsap.
Hometown hopeful Anthony Davis of the Pelicans, and centers DeAndre Jordan of the Clippers and DeMarcus Cousins of Sacramento were among those who missed out. Orlando’s Arron Afflalo and Toronto’s Kyle Lowry didn’t make the cut in the East.