Douglas returned to England after the end of the war, initially spending time at Chatham Dockyard studying naval architecture, before going to sea again, mostly serving in the Mediterranean and the English Channel. Douglas commanded the 74-gun third rate from October 1787 during the period of the Spanish Armament. He was in command of the 32-gun , which had been appointed the guard ship at Weymouth, when the town was visited by King George III. Douglas conducted the King on his first voyage aboard a warship, and on 13 September 1789 King George appointed Douglas a knight bachelor. Also in 1789 Douglas and his uncle Snape Hamond were members of the court for the court martial of the mutineers of the "Bounty". Douglas was then in command of the 74-gun from 1790.