Anaplastic thyroid cancer (ATC) is the most aggressive with the worst prognosis of thyroid malignancies. The malignant transformation from preexisting differentiated thyroid cancer (DTC) remains ambiguous. Another rare cutaneous tumor known as dermatofibrosarcoma protuberans (DFSP) has a low metastatic rate yet a high risk of recurrence. DFSP requires diagnosis by pathological examination, and the main treatment is surgical resection with a good negative margin. We describe a young patient with malignant transformation of ATC from differentiated papillary thyroid cancer with the collision of DFSP variants. A 42-year-old lady presented with left neck swelling, which developed 6 months after total thyroidectomy and bilateral lymph node dissection for papillary thyroid carcinoma (PTC). Despite radioiodine ablation after surgery, the swelling progressively increased in size. It involved the overlying surrounding skin and previous thyroidectomy scar. Serum thyroglobulin was high, with low antithyroglobulin suggestive of local recurrence. A tissue biopsy of the lesion confirmed the anaplastic transformation of PTC. She has unilateral left vocal cord palsy due to disease progression. Further fluorodeoxyglucose-positron emission tomography (FDG-PET) scan revealed a positive uptake only in the left thyroid bed. She underwent debulking surgery, tracheostomy, and percutaneous endoscopic gastrostomy, given her young age and good performance status. The final histopathology results showed a collision tumor of DFSP with anaplastic thyroid carcinoma. The disease progressed, and she succumbed to the disease 6 months after surgery. DFSP variants and ATC are two rare kinds of tumors. There are a few reports in the literature on metastatic DFSP variants to the thyroid gland. The diagnosis of ATC or even DFSP is important as the management will be different in the intent of therapy. We report a case of these collision tumors for their rarity and difficulty in their management.