/ AbstractWe report the first analysis of background data from DM-Ice17, a direct-detection dark matter experiment consisting of 17 kg of NaI(Tl) target material. It was codeployed with IceCube 2457 m deep in the South Pole glacial ice in December 2010 and is the first such detector operating in the Southern Hemisphere. The background rate in the 6.5 - 8.0 keVee region is measured to be 7.9 +/- 0.4 counts/day/keV/kg. This is consistent with the expected background from the detector assemblies with negligible contributions from the surrounding ice. The successful deployment and operation of DM-Ice17 establishes the South Pole ice as a viable location for future underground, low-background experiments in the Southern Hemisphere. The detector assembly and deployment are described here, as well as the analysis of the DM-Ice17 backgrounds based on data from the first two years of operation after commissioning, July 2011 - June 2013.