The Microsoft Windows Update to address this is still planned for September I was informed.
It is progressing through the internal rings before getting to Insiders and the public.

I got the exact same problem, basically unusable

I rolled back to the pre Anniversary Win 10 update and reinstalled 7.9 M5 drivers from here:

http://www.displaylink.com/downloads/windows

Works perfectly again

Sure I already replied to this

Had the same issue, so rolled back to pre Win 10 Anniversary update and reinstalled 7.9 M5 release for Windows from here - http://www.displaylink.com/downloads/windows

Works perfectly again

KB3194496 released today may fix this and other issues
 

Hi just seeing a KB update coming through today.

KB3194496

This may be the one!
Installing and will give some feedback.

Thanks

Thanks for the flag, I'll get a tester to validate this in the morning.
From the name, date, size and modified file list, I also think it should be the one we've been waiting for...

Just downloaded this update and the lag has finally disappeared!

Hallelujah! ...... kinda
 

Can also confirm that lag is significantly reduced with this update, even with laptop screen disabled which is the greatest improvement to me. Stutter is definitely 100% gone, I do still feel the tracking lag though but honestly this may be as good as the dock allows it to be on Win10 AU.

I tried briefly on my colleague's setup who is still on 1511+7.9 and we both feel the difference when switching between each other's computers. It's not major, but it's definitely there. AU introduced ~50ms of mouse tracking delay and during cpu intensive tasks Everything slows down but uh... I guess you win some and lose some. It works well enough for me to not really bother anymore.

Cheers Alban for following this issue up.

You're welcome.
We do have performance improvements lined up on Win10 AU.
Some of which will be delivered in 8.1 driver linked with the mouse cursor especially, with further ongoing work.
We laid the foundation, we are improving stability, and then performance/features.
Kind regards,
Alban

This is a Windows update as opposed to a DL update?

My machine just auto updated, and now I've got massive lag back again

Do I really have to revert back to a previous build every time this happens?

Are DL working on a solution?

CPU Usage - DisplayLinkManager Application - 22% +

Actually, seems to be ok now

DL manager app at 0.x% as you'd hope

I'll monitor and update if it comes back