Who was Dignam working for?

Sullivan was never linked to final string of executions and his duplicity was never brought to light. Nothing was presented to the audience to suggest Dignam learned of it somehow, though it's likely he suspected it. That being the case, it's more likely he was seeking retribution for Queenan's death.

The envelope that Costigan gave to Madolyn that she wrote his name on and put into her desk drawer gave Sullivan up. It identified Sullivan as the rat and instructed Madolyn to go to Sergeant Dignam with the information if anything were to happen to Costigan.

Sure, Sergeant Dignam could've arrested Sullivan, but all that damn paperwork. There would always be another paranoid rat out there who would worry if Sergeant Dignam knew something more and the streets would continue to flow of rats blood.

Who was Dignam working for? No one, Madolyn was still alive. She knew too much and Dignam would've taken her out as well if he thought she was a threat.

Sergeant Dignam was placed on leave after Captain Oliver Queenan death and absent from that point to the ending. He wasn't in the office sniffing around and keeping tabs of anyone. He was out.

Sullivan's death closed the Frank Costello case for all involved. Dignam avenged the deaths of Captain Oliver Queenan and Billy Costigan, as well as giving Madolyn and the baby the chance to move on safely.

You could as well see it as Dignam was a rat even though it's not mentioned, NOTE: there is no connection to Dignam or to anything that happens after he is putt on administrative leave, and now after all this went down, he has come to clean up the mess. There is no mention of how Dignam found out Sullivan was bad, it could be he knew all along or that Sullivans wife said something.

The final shot helps explain it all; although seen as too much or over kill, it is of the state house and a rat sniffing around and then walking off screen. Honestly the death and the end shot are just to help remind us the viewer of the full circle between the cat and mouse chase. It never ends

I thought this theory a lot myself but maybe dingham was a rat. The way he talks to Matt Damon's character, it's like a kid in a school yard and Mark was the bully.

He goes away for two weeks he comes back and everyone he knew in that circle was dead and the only survivor was Damon. Whalberg probably knew about the one cop but knew he wasn't given any real information.

I mean because if Damon didn't know about that one cop, maybe that one cop didn't know about Dingham, maybe Dingham was alot higher in the rankings of the Castello family than anyone ever knew.

It's possible, it would explain why when he walks off stage the lone rat also sniffs out then walks off stage. That was a pretty gangster hit job

Dignam was working for the Police Department, and himself.

When Costigan (DiCaprio) was murdered, you may recall, Sullivan (Damon) asked Trooper Brown why he hadn't brought Dignam (Wahlberg) to the bust. You may also recall that after going down the elevator from the roof, Trooper Barrigan was poised on the ground floor to kill both Costigan and Trooper Brown. Presumably, had Brown gotten Dignam to the building, Barrigan would have killed him as well. As it were, Sullivan kills Barrigan to leave no witnesses.

I believe Dignam had always suspected that Sullivan was the mole, which is why he was always somewhat belligerent with him. It was a show of force and rank, to let him know in a not-very-subtle way that there was no trust between them.

After the shootout in the abandoned building referenced in my first paragraph, there is no doubt in Dignam's mind that Sullivan is the mole, and Sullivan had something to do with Queenan's death. Knowing Sullivan had just gotten kudo's for "cracking the case" by naming Barrigan as a mole, there was only one way to get justice for Queenan, Costigan and everyone else; take out Sullivan.

Billy gave the therapist lady an envelope of all the tapes showing Matt Damon's guilt. Walhberg knows Damon is the rat after hearing those tapes and then kills Damon.

Dignam was on his own, a loose cannon and a straight shooter. He was unaffiliated with anyone other than the police, and his personal loyalties lay with Queenan in particular. Dignam knew that Colin was a mole and used his police training to murder him and get away without leaving any evidence.

Wahlberg's character is the last mole. Everyone has this one wrong. It's not a "revenge kill" at the end. It's a hit. He finishes Damon so he can move on. He survives the entire thing. Silly. He disappears because it's unsafe. He knows Nicholson is an FBI informant. He walks away. Comes back to finish Damon so he never figures it out. duh. I've never seen this explanation anywhere. It's so obvious.