Demand response has been studied in district heating connected buildings since the rollout of smart, communicating devices has made it cost-effective to control buildings’ energy consumption externally. This research investigates optimal demand response control strategies from the district heating operator perspective. Based on earlier simulations on the building level, different case algorithms were simulated on a typical district heating system. The results show that even in the best case, heat production costs can be decreased by only 0.7%. However, by implementing hot water thermal storage in the system, demand response can become more profitable, resulting in 1.4% cost savings. It is concluded that the hot water storage tank can balance district heating peak loads for longer periods of time, which enhances the ability to use demand response strategies on a larger share of the building stock.