Lima (https://github.com/lima-vm/lima) is the best way I've found to handle Docker on M1. Docker Desktop is a hog.
Their FAQs are pretty good, too (https://github.com/lima-vm/lima#faqs--troubleshooting).
I use Docker Desktop as well and when you don't have to run x64 containers through QEMU, the images work just fine. I have to run containers through QEMU at the moment and while it does indeed have a performance penalty, I honestly got used to it pretty quick. They are also dropping lots of experimental upgrades (some of which have worked pretty well in my case).
I'm using Docker inside a Vagrant virtual machine in my new M1 mbp. Works great! (I use ubuntu arm vagrant boxes available at vagrantcloud, but you can also bake your own image using, for instance, packer).
Biggest advantage for me: I don't pollute my Macos.
Using Docker Desktop for Django (well, it runs the daemon, still mostly CLI it)
I use Rancher Desktop which uses Lima.
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Just docker desktop https://www.docker.com/products/docker-desktop/
Works absolutely fine. The only issues I had early on were some images I was using were not yet built for ARM. So it would run x86 containers through QEMU I believe, which has a pretty big performance penalty.
Luckily those images now have ARM builds so I have no other issues.