Bennet Chenene gave the hosts the lead on 38 minutes with a composed right-footed finish, before Katlego Mashego added a second on the stroke of half-time.
It is a fine victory for The Birds against an inform Dikwena side who had won nine of their previous 10 League matches.
Stars were quickest out the blocks and Botswana international Mogakolodi Ngele fired just wide from a free-kick, before goalkeeper Greg Etafia – playing his 300th League game – produced a fine save from Thuso Phala.
But as the half wore on, so the home side began to come into the play more and Mashego went close as he struck the ball into the side-netting following a neat turn.
The home side did take the lead on 38 minutes though; Chenene racing onto a great ball from Lefa Tsutsulupa and slotting the ball past Siyabonga Mpontshane.
By now Swallows had hit their stride and were playing with real intent. Chenene almost got a second but fired into the side-netting, before Mashego made it 2-0 just before halftime – some hesitant defending allowing the striker to score from close-range.
Gilbert Mapemba almost made it 3-0 early in the second half when his 35-yard effort crashed against the crossbar and away to safety.
Stars failed to find a way back into the fixture, but can still reflect on a fine 2012 and they will see in the new year in third place.
Swallows climb up to 11th, four points above Chippa United in the relegation play-off position.