The cascade digital circuit system based on DNA strand displacement is investigated in this paper. In order to more accurately represent the reaction process, the loss of reaction substrate caused by base pair mismatch and “hairpin structure” in the process of DNA strand displacement are taken into account. Meanwhile, the time delay of DNA double-strand molecular breaks is also added to the constructed system model. The positivity of solutions, the stability and bifurcation at equilibrium point are investigated at length. It can be observed that when the time delay parameter pass some critical values, Hopf bifurcation may appear near the equilibrium point. By choosing different initial parameters, the equilibrium state reached by the system is different, and the stability of the system under equilibrium state will also be different.