Up to this point, there was no particular reason to consider Dr Strange as one of Marvel's more interesting characters. Yeah, Ditko's art was psychedelic, but the series suffered from fairly mundane villains and supporting characters. There were hints that Dr Strange was becoming more popular; at first the character did not even appear in every issue. That quickly changed, and he even began to share cover space with the Human Torch.
But the series really took off with the battle between Dr Strange and Dormammu starting in Strange Tales #126. Here's the memorable splash page:
Dr Strange is summoned by the Ancient One. The Dread Dormammu is planning to leave the Dark Realm and come to Earth. The Ancient One is unable to face him, so the Doc is drafted as a replacement:
Now there's a villain worthy of facing Dr Strange. And a durable companion is introduced a short while later:
The actual confrontation between Doctor Strange and the Dreaded One takes place in the following issue. We learn that Dormammu is the only thing keeping the Mindless Ones from breaking through into the Dark Realm.
In the battle itself, we see signs of Ditko's influence on the character:
And when the Mindless Ones break through, we see that Dr Strange is a man of honor:
He lends his support to Dormammu and together they repel the invaders, putting the Dreaded One in Dr Strange's debt:
This highlights one of the odder aspects of some of the Marvel villains. There were several who possessed a moral code despite their essentially evil nature--Dr Doom, the Sub-Mariner (back when he was played as a villain) and Galactus were notable for this supposed trait. In a sense this is just another out for the writer, which may explain why Lex Luthor underwent a similar transformation in the 1960s.