I recently watched the video clips of Dire Straits performing Sultans of Swing and Lions live on the British Old Grey Whistle Test again. It is one of the earliest videos that exist, recorded in Manchester on May 15, 1978, about three months after the first CD.
Sultans of Swing
Let’s have a look at the gear we can see in this clip. Knopfler plays his red maple neck Fender (# 80470) with the greenish pickguard that originally belongs on his other red Strat (click here for more info). The black volume knob is missing, just like on all pictures from early ’78. He had the brown guitar strap on all pictures before late October 1979, an easy way to tell the year an old Dire Straits picture is from. The intro and the middle solo of Lions are played with the middle pick-up it seems, the verses and Sultans of Swing with bridge & middle pick-ups.
The amp is a silverface Fender Twin Reverb, probably the same he played with a Marshall cab on the two videos from middle 1978 (a playback of Sultans of Swing and Wild West End from June 12, and Sultans of Swing in the Revolver show, July 9.) He actually had the Twin until October 1978 when he replaced it with the Music Man HD 130 212 . David plays a Twin, too. There is another guitar amp: a small Peavey backstage amp, on the left side of the stage near the bass amp. I have no idea what it is intended for. On the mentioned playback videos of Sultans of Swing and Wild West End you can see it there as well (note that although these are only playback, the stage is properly built up with all their normal gear it seems, maybe for the next day’s gig, Sheffield, June 13).
Knopfler definitely uses the Morley volume pedal here. And the green MXR analog delay can be seen on the right side of the microphone stand at the beginning of Sultans of Swing. What is strange however it that at the beginning of Lions Knopfler taps with his right foot on two effects it seems, first the MXR right of the microphone stand, then on something left of it (but right of the Morley). I have no idea what this is, but this article seems related here. Maybe a compressor or some boost?
The sound on both clips is fat and warm with some distortion. If you have ever played a silverface Twin this is a bit surprising because the Twin is rather associated with a crsip, cristal clear sound.