DemoSat

On 21 March 2007, the second Falcon 1 lifted from Omelek Island. The first stage performed cleanly. At staging, however, the separating interstage clipped the second-stage engine bell — and that contact, minor as it appeared, set off a cascade: propellant sloshing in the LOX tank induced a roll that the thrust vector control system overcorrected for, given the compromised nozzle geometry. The second stage shut down at T+7 minutes 30 seconds, leaving the vehicle at 289 km altitude with a final velocity of 5.1 km/s, against the 7.5 km/s needed for orbit.

Flight 2 made it further than Flight 1: past staging, past 200 km, out of the atmosphere. It did not make orbit. SpaceX had now failed twice in a row from Omelek Island.