Same issues
I have what sounds like the same issue. Macbook Pro M1, Targus DV4k docking station. I'm currently using DisplayLink 1.12.4.
I use my MBP mostly in docked, clamshell mode, but sometimes use it without the dock. Wake and monitor detection seems to work most of the time as long as I haven't used the MBP without the dock. If I have used it without the dock (e.g. opened and woken it), I generally have to open the lid and power cycle the dock in order for the monitors to be detected properly
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