We report ab initio calculations for positively charged fragments of dry poly(dC)-poly(dG) DNA, with up to 4 C-G pairs. We find a strong hole-lattice coupling and clear evidence for the formation of small polarons. The largest geometry distortions occur in only one or two base pairs. They involve the stretching of weak bonds within each base pair, increasing the distance of positive hydrogens, and decreasing that of negative oxygens, to the region in which the hole localizes. We obtain an energy of approximately 0.30 eV for the polaron formation, nearly independent of the chain size. From it, we can estimate an activation energy for polaron hopping of approximately 0.15 eV, consistent with the available experimental value.