Did I see the dragon capsule on Friday night? I live just south of Sydney Australia, and I went outside to watch the ISS pass overhead on Friday night. The ISS was following a smaller object easily visible to the naked eye.

Sydney time 20.43 or UTC 9.43. (Friday March 8) The smaller object was ahead of the ISS by maybe 25 degrees. Appeared to be moving at exactly the same speed and trajectory.

Was this the the SpaceX Crew Dragon capsule? Sorry if this is the wrong place to ask.
I have certainly watched the ISS and an undocked Shuttle Orbiter chase each other across the sky. Since they appeared to be of equal brightness, I didn't know which was which. Their angular separation from my POV was approximately 20°, so their actual separation would have been about 150km. It was one of the last Shuttle flights, so I was very lucky to see it.

It is possible that you saw the Dragon capsule, and it would certainly have appeared to be be fainter than the ISS. The easiest way to establish the fact is by using a program like Stellarium. This will show you if the ISS was visible at your location, given the date and time of day.