Re^2: A 'strange' character("^M") of contrasting color appearing unexpededly at the end of lines of a unix file. How can it be removed?

You may have an intention error in your while(<FILE>) loop. Right now, you're testing if the string ends with a \r and then you're removing the first occurrence of it. If your string is "Hello \rthere\r\n", your code would print "Hello there\r\n" to DST.

If I understand your intention correctly, I would replace the while loop with the following:

while (<FILE>){
    s/\r$//;
    print DST $_;
}
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If you want to get rid of all occurrences of \r in the line, you could just say:

while (<FILE>){
    s/\r//g;
    print DST $_;
}
[download]

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