The man, in his 20s and from Crumlin, had not contacted his family for a number of weeks.
Gardai began their probe after receiving information from a source in the city's northside that he had been abducted and killed.
The individual is suspected of involvement in gang-related crime in the south city, and was an associate of 'Champagne' Carroll, a drug dealer murdered in Grumpy Jack's pub in the Coombe last February.
A fortnight ago, gardai received information that the man had been abducted and murdered by a Finglas criminal, who had agreed to collect a cash debt from him.
Gardai notified the man's family and relatives, and officers attempted to contact the missing man, to no avail.
Officers were preparing to upgrade their enquiry last week when the man phoned his family on Thursday last to say that he was alive, but lying low for a period. He has not returned to Dublin's southside, sources say.
The man is suspected of ongoing involvement in underworld activities in the south city, and was investigated over a pipe bomb attack in Crumlin in January, which was not connected to the Grumpy Jacks murder.
He has emerged in the past two years as a leading underworld figure, and is closely affiliated with a group of Coombe based drug dealers.
The incident is the latest in a number of underworld episodes which have involved associates of 'Champagne' John Carroll since his murder.
Carroll was a leading drug importer and his death has left a number of his former associates exposed to threats and money demands, sources say.
This is because other dealers to whom Carroll owed cash are now seeking to recoup it from his former associates, who in turn are issuing counter threats.
One of the cash demands has been farmed out to a Finglas criminal, who has a reputation for violence.
Gardai have sent a file on the Champagne John murder to the DPP, and are confident of a charge being brought in the case.
A number of individuals have been arrested over the killing.
Carroll was shot dead as he sat drinking in Grumpy Jack's bar in the Coombe, having been followed there after socialising at other pubs on the city's southside, gardai believe.