The objective of this paper is to demonstrate the use of the Dynamic Flowgraph Methodology (DFM) during the design and verification of programmable electronic safety-related systems. The safety system consists of hardware as well as software. This paper explains and demonstrates the use of DFM to verify the hardware and application software design for safety issues. The outcome of the design verification is used to define the necessary diagnostic capabilities that are essential to guarantee the correct functioning of the safety system. The paper also demonstrates how DFM can be used as an application software test tool.