Sensor network facilitates monitoring and controlling of physical environments. These wireless networks consist of dense collection of sensors capable of collection and dissemination of data. They have application in variety of fields such as military purposes, environment monitoring etc. Typical deployment of sensor network assumes central processing station or a gateway to which all other nodes route their data using dynamic source routing (DSR). This causes congestion at central station and thus reduces the efficiency of the network. In this work we will propose a better dynamic source routing technique using network coding to reduce total number of transmission in sensor networks resulting in better efficiency.