Madhouse has been responsible for the dissemination of true dancehall music worldwide by releasing hit tunes without compromising the art-form by watering down the music in hopes to "cross-over" into the mainstream. Madhouse Records does not follow trends, it sets them. In 1987 Janet was living in London, running Germaine Music along with producer Donovan Germaine. Meanwhile Dave's brother, Tony Kelly, was assistant engineer at Tuff Gong and Dave was being trained under his wing.

By 1989 Germaine , having recognized Dave's talent, offered him a position at the infamous Slipe Road Penthouse studio. Janet, also began managing Maxi Priest that year. The following year Tony and Dave, at young ages 21 and 18 respectively, accompanied Madhouse crew on the road as engineers.

Two years later Dave returned from the road full of ideas and itching to execute them. His career prospered in the studio. As a songwriter, musician, and engineer, Dave Kelly played a crucial role during Penthouse's glory days. By 1992 Dave had dancehall classics such as Buju Banton "Bogle" "Love Mi Browning" and "Batty Rider;" Beres Hammond/Cutty Ranks "Tempted to Touch," Tony Rebel's "Fresh Vegetable" and Marcia Griffith's "Fire Burning," as his production credits.

Janet Davidson, whose management experience included everyone from Peter Tosh to Placido Domingo, recognized the need for hyper-creative Kelly to expand his potential as a producer. Together they set up Madhouse Records. That formation of his own company with Janet Davidson enabled him to maintain control over the production of his material. In the beginning they worked from home but were soon able to re-invest the fruits of their labour back into the business; and it expanded. In 1996 she and Dave started a distribution house, Platinum Distribution at Mikey Bennett's Grafton Road recording complex and by 1997 Platinum Distribution moved into its own building.

The Madhouse Complex was then completed at Half Way Tree including offices as well as The Boxx, Dave's own recording studio. Madhouse is highly organized and efficient in a world where chaos reigns supreme. Whereas the traditional reggae label floods the market with dozens of releases, Madhouse only drops a few select records a year. Because each record stamped with the logo has been tailored-made to bring out the best in the artist; the Madhouse logo is a symbol with credibility. Assuring high quality tunes, Madhouse has established "die-hard" loyalty with both deejays and consumers alike.

Releases on the flagship Madhouse record label and sub-labels like Xtra Large (XL) which cater to more hardcore tastes include: Beenie Man's "Slam" and "Old Dog," Lady Saw's "Sycamore Tree" and "Eh Hem," Frisco Kid's "Rubbers" and "Little and Cute," Bounty Killer's "Eagle and the Hawk" and "Can't Believe My Eyes," Spragga Benz "Dolly House" and "We Nuh Like," Baby Cham's "Man and Man" and "Gallong Yah Gal," Wayne Wonder's "Joyride" and "Bashment Girl," Daddy Screw/Donovan Steele's "Kerry," as well as Buju Banton's "Big It Up" and "Only Man."

Custom-built Madhouse Rhythms include Pepperseed, Rae Rae, Action, Arab, Joyride, Haunted, Showtime, Stink, Dugu Dugu, Bruk-Out, Back Yard, Bug, Clone, Bounce, and Return.

An integral part of Madhouse music is the Alias project. Described by Kelly, "Alias is an artists' collective of the new millennium." With Alias, no holds are barred. Anything goes except one thing; as the artists involved with the Alias project enter the session, they must leave their egos outside the studio. The artists (all established) assume aliases, allowing them to shed any preconceived notions or stereotypes as they test unchartered waters . Producers deejay, deejays play instruments, and singers produce and write tunes during these spontaneous sessions .

Some of the other projects that Dave Kelly has worked on include Shaggy's "Hotshot," Rayvon's "My Bad," the title theme for Scooby Doo, and Foxy Brown's "Broken Silence."