diff --git a/controllers/datamovementmanager_controller.go b/controllers/datamovementmanager_controller.go
index 5c60b60a..08b5fdbc 100644
--- a/controllers/datamovementmanager_controller.go
+++ b/controllers/datamovementmanager_controller.go
@@ -399,7 +399,7 @@ func (r *DataMovementManagerReconciler) removeLustreFileSystemsFinalizersIfNeces
 	// Now the DS does not have any lustre filesystems that are being deleted, verify that the
 	// daemonset's pods (i.e. dm worker pods) have restarted
 	d := ds.Status.DesiredNumberScheduled
-	if ds.ObjectMeta.Generation != ds.Status.ObservedGeneration || ds.Status.UpdatedNumberScheduled != d || ds.Status.NumberReady != d {
+	if ds.Status.ObservedGeneration != ds.ObjectMeta.Generation || ds.Status.UpdatedNumberScheduled != d || ds.Status.NumberReady != d {
 		// wait for pods to restart
 		log.Info("Requeue: wait for daemonset to restart pods after dropping lustrefilesystem volume",
 			"desired", d, "updated", ds.Status.UpdatedNumberScheduled, "ready", ds.Status.NumberReady)
diff --git a/controllers/datamovementmanager_controller_test.go b/controllers/datamovementmanager_controller_test.go
index a94e10b1..b634f2b7 100644
--- a/controllers/datamovementmanager_controller_test.go
+++ b/controllers/datamovementmanager_controller_test.go
@@ -210,11 +210,18 @@ var _ = Describe("Data Movement Manager Test" /*Ordered, (Ginkgo v2)*/, func() {
 				desired := daemonset.Status.DesiredNumberScheduled
 				updated := daemonset.Status.UpdatedNumberScheduled
 				ready := daemonset.Status.NumberReady
+				expectedGen := daemonset.ObjectMeta.Generation
+				gen := daemonset.Status.ObservedGeneration
+
+				// Fake the updates to the daemonset since the daemonset controller doesn't run
+				fakeDSUpdates(daemonset, g)
+
 				if v.Name == lustre.Name {
 					// If the volume still exists, then so should lustre + finalizer
 					g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(lustre), lustre)).Should(Succeed())
 					g.Expect(controllerutil.ContainsFinalizer(lustre, finalizer)).To(BeTrue())
-				} else if updated != desired && ready != desired {
+
+				} else if gen != expectedGen && updated != desired && ready != desired {
 					// If pods have not restarted, lustre + finalizer should still be there
 					g.Expect(k8sClient.Get(ctx, client.ObjectKeyFromObject(lustre), lustre)).Should(Succeed())
 					g.Expect(controllerutil.ContainsFinalizer(lustre, finalizer)).To(BeTrue())
@@ -223,7 +230,34 @@ var _ = Describe("Data Movement Manager Test" /*Ordered, (Ginkgo v2)*/, func() {
 					return k8sClient.Get(ctx, client.ObjectKeyFromObject(lustre), lustre)
 				}
 			}
+
 			return nil
-		}).ShouldNot(Succeed())
+		}, "15s").ShouldNot(Succeed())
 	})
 })
+
+// Envtest does not run the built-in controllers (e.g. daemonset controller).  This function fakes
+// that out. Walk the counters up by one each time so we can exercise the controller watching these
+// through a few iterations.
+func fakeDSUpdates(ds *appsv1.DaemonSet, g Gomega) {
+	const desired = 5 // number of nnf nodes
+
+	ds.Status.DesiredNumberScheduled = desired
+
+	ds.Status.ObservedGeneration++
+	if ds.Status.ObservedGeneration > ds.ObjectMeta.Generation {
+		ds.Status.ObservedGeneration = ds.ObjectMeta.Generation
+	}
+
+	ds.Status.UpdatedNumberScheduled++
+	if ds.Status.UpdatedNumberScheduled > desired {
+		ds.Status.UpdatedNumberScheduled = desired
+	}
+
+	ds.Status.NumberReady++
+	if ds.Status.NumberReady > desired {
+		ds.Status.NumberReady = desired
+	}
+
+	g.Expect(k8sClient.Status().Update(ctx, ds)).Should(Succeed())
+}