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Microstructure level inhomogeneities between the harder martensite phase and the softer ferrite phase render the dual phase (DP) steels more complicated failure mechanisms and associated failure modes compared to the conventionally used low alloy homogenous steels. This paper examines the failure mode DP780 steel under different loading conditions using finite element analyses on the microstructure levels. Micro-mechanics analyses based on the actual microstructures of DP steel are performed. The two-dimensional microstructure of DP steel was recorded by scanning electron microscopy (SEM). The plastic work hardening properties of the ferrite phase was determined by the synchrotron-based high-energy X-ray diffraction technique. The work hardening properties of the martensite phase were calibrated and determined based on the uniaxial tensile test results. Under different loading conditions, different failure modes are predicted in the form of plastic strain localization.