Gardaí from the City Centre Policing Unit were on patrol on Glasheen road at 11pm and saw a man they believed had taken part in a drug deal.
The man ran when officers attempted to question him but was eventually stopped and found in possession of €2,000.
A search of a house nearby turned up €9,700 of cannabis herb and €8,440 of cocaine.
A second man in his 20s was arrested at the house and brought to the Bridewell Garda Station.
Both men have since been released and a file will be prepared for the DPP.
It was the second operation involving Garda dog 'Rex' over the weekend, on Friday he discovered €16,000 of cocaine and €9800 worth of cannabis herb in Mallow.
