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A Dolly for Sue (as she calls herself) is a seemingly normal girl rag doll with red hair and a red gingham (checkered) dress. Her misfit problem is never explained on the special, but was revealed on NPR's Wait Wait… Don't Tell Me! news quiz show (broadcast December 8, 2007). The show revealed that Rudolph's producer, Arthur Rankin Jr., says Dolly's problem was psychological, caused from being abandoned by her mistress and suffering depression from feeling unloved.
I think her name was Susie, but I could be wrong . I was just watching the show, but missed that Misfit Island part when I took the dogs out.