Agnes May Peters Schaefer, always called Dot by her family, was born in Conrad, Montana, on January 8, 1926. She was the fourth of six children of Charles and Anna Thies Peters. She grew up on a farm near Ledger, Montana, and attended Central School there until sixth grade. Her original home was built from two homestead shacks that her father pushed together and added rooms to over time. Her father retired in 1938, and the family moved to Mountain Brook near Kalispell. She graduated from Flathead County High School in Kalispell in 1944 and attended Northern Montana College in Havre. She then taught school in a rural school at Devon, near Chester. On March 29, 1947, she married Leo J. Schaefer, who had moved to Montana following his WWII service.

After farming for two years north of Cut Bank, Agnes and Leo moved to Rudyard, where he owned the Gambles store. They had 10 children while they lived in Rudyard and moved to Livingston in 1964 where their youngest son was born. Leo owned the Western Auto store in Livingston where Agnes frequently worked, sometimes with a child in tow. She waited on customers, managed the ordering and balanced accounts.