Did you read all of http://docs.moodle.org/en/DragMath_equation_editor? You have not provided complete details of what you did, nor what the results were, so it is difficult to say what your problem is, but if dragmath is inserting text which appears as text between double dollars my guess is that you don't have anything installed to display Tex. Dragmath itself DOES NOT display Tex. Please confirm that you turned on Moodle Tex filter and debugged, or installed another Tex display tool.
DragMath equations not displaying properly
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