@Codemaster92163: I didn't know it isn't dragon kick specific, lol. It's the first time ever I've seen this glitch, too. The initiation of the glitch is probably distance related, like you said. I was so surprised when it happened though. It felt like such a cheap win!
That's not dragon kick specific. That's happened to a lot of moves, such as Pai's dragon kick and Nyo's 7KP.
I think any move that causes a rolling back animation on hit can cause this glitch. How, I don't know. Distance related, perhaps? Either way, it's more common than you may think.
This is a lobby match in which I ended the match with a broken Dragon Kick. Apparently the game decided to give me twice the amount of damage for a single Dragon Kick. Not to mention the fall damage that got me the K.O.!