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The B-side of the "Water of Love" single, "Down to the Waterline," was the first song on the Dire Straits album and was also written by Mark Knopfler and included on the demo tape that the band sent to Charlie Gillett leading to its first recording contract.

The lyrics of "Down to the Waterline" tells of a brief sexual tryst. Cary Darling of Billboard praises the song as superior to the other love songs on side 1 of Dire Straits, including "Water of Love." According to Mark Knopfler's brother and fellow Dire Straits member David, the song's imagery is based on Mark's memories of walking along the River Tyne at night under the lights with his girlfriend when he was a teenager. Darling praises the lyrics as "incisive" but "never cliched." Darling also praises the moody foghorn sound that opens the song, Knopfler's "quick finger picking" guitar playing and the tightness of the band on this song. High Fidelity also commented on the song's "tender, passionate, and yet unsentimental" erotic imagery. The Rolling Stone Album Guide commented on the song's "galloping groove."

"Down to the Waterline" later appeared on Dire Straits live album Live at the BBC and on the Dire Straits "Best of" compilation album Money for Nothing.

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