The 1960s trend toward turbine-powered military aircraft inevitably led to discussions for a larger turbine-powered derivative of the Caribou. U.S. Army leaders speculated that the heavy demand for Caribous in Vietnam would prove the need for an advanced version and subsequently pave the way for Army participation in the follow on program. In the Spring of 1962 DeHavilland won a U.S. Army competition for a STOL aircraft capable of carrying the same tactical loads as the Boeing Vertol CH-47 Chinook helicopter (which was just entering production). Originally called the Caribou lI, DeHavilland renamed the aircraft the DHC-5 Buffalo and the Army gave the aircraft the designation AC-2 (which became CV-7A in 1962).

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