We present new HST STIS NUV–MAMA and STIS CCD observations of the BL Lac object AO 0235+164 and the intervening damped Ly \alpha ( DLA ) line at z _ { a } = 0.524 . The line profile gives N ( HI ) = 5 \pm 1 \times 10 ^ { 21 } cm ^ { -2 } and , combined with the H I 21 cm absorption data leads to a spin temperature of T _ { s } = 220 K \pm 60 K. Those spectra also show a strong , broad feature at the expected position of the 2175 Å graphitic dust feature at z _ { a } = 0.524 . Assuming a Galactic type dust extinction curve at z _ { a } = 0.524 gives a dust–to–gas ratio of 0.19 Galactic , but the fit , assuming the underlying , un–reddened spectrum is a single power–law , is poor in the far–UV . A dust–to–gas ratio of 0.19 Galactic is similar to the LMC , but the AO 0235+164 spectrum does not fit the LMC extinction curve , or the SMC extinction curve ( which has practically no 2175 Å feature ) . A possible interpretation includes dust similar to Galactic , but with less of the small particles that produce the far–UV extinction . The metallicity of the z _ { a } = 0.524 absorber , estimated from the observed N ( HI ) and excess X-ray absorption ( beyond Galactic ) derived from contemporaneous and archival ASCA and ROSAT X-ray data , is Z = 0.72 \pm 0.28 Z _ { \sun } , implying in turn the dust–to–metals ratio of 0.27 Galactic . If the dust mass density is the same in the z _ { a } = 0.524 DLA system as in our Galaxy , only 14 % ( \pm 6 % ) of the metals ( by mass ) are in dust compared with 51 % , 36 % , and 46 % for the Galaxy , LMC , and SMC respectively . Such a dusty z _ { a } = 0.524 AO 0235+164 absorption system is a good example of the kind of DLA system that will be missed due to selection effects , which in turn can bias the measurement of the co-moving density of interstellar gas ( in units of the closure density ) , \Omega _ { g } , as a function of z .