From Jeff Masters Wunderblog:
Tropical Storm Dolly has emerged over the Gulf of Mexico after a short passage over Mexico's Yucatan Peninsula, and is already beginning to organize. Dolly will potentially be a dangerous hurricane for Texas and northern Mexico. Satellite loops show a large and expanding circulation, with good upper-level outflow developing to the west and north. The surface circulation is not well formed yet. Dolly's intense thunderstorms lie mainly to the north of the center, and these thunderstorms brought heavy rains of 4-6" to the Cayman Islands yesterday. Dolly's heaviest rains passed through the Yucatan Channel last night and this morning. Rainfall amounts were less than four inches over Cancun, Cozumel, and Western Cuba. Winds were only 40-50 mph over this region, so there should have been little damage.
More discussion of intensity and tracks.