Magnetic frustration and low dimensionality can prevent long range magnetic order and lead to exotic correlated ground states. SrDy$_2$O$_4$ consists of magnetic Dy$^{3+}$ ions forming magnetically frustrated zig-zag chains along the c-axis and shows no long range order to temperatures as low as $T=60$ mK. We carried out neutron scattering and AC magnetic susceptibility measurements using powder and single crystals of SrDy$_2$O$_4$. Diffuse neutron scattering indicates strong one-dimensional (1D) magnetic correlations along the chain direction that can be qualitatively accounted for by the axial next-nearest neighbour Ising (ANNNI) model with nearest-neighbor and next-nearest-neighbor exchange $J_1=0.3$ meV and $J_2=0.2$ meV, respectively. Three-dimensional (3D) correlations become important below $T^*approx0.7$ K. At $T=60$ mK, the short range correlations are characterized by a putative propagation vector $textbf{k}_{1/2}=(0,frac{1}{2},frac{1}{2})$. We argue that the absence of long range order arises from the presence of slowly decaying 1D domain walls that are trapped due to 3D correlations. This stabilizes a low-temperature phase without long range magnetic order, but with well-ordered chain segments separated by slowly-moving domain walls.
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