  We present near-infrared (NIR) and optical observations of the Type Ic
supernova (SN Ic) SN 2021krf obtained between days 13 and 259 at several
ground-based telescopes. The NIR spectrum at day 68 exhibits a rising $K$-band
continuum flux density longward of $\sim$ 2.0 $\mu$m, and a late-time optical
spectrum at day 259 shows strong [O I] 6300 and 6364 \r{A} emission-line
asymmetry, both indicating the presence of dust, likely formed in the SN
ejecta. We estimate a carbon-grain dust mass of $\sim$ 2 $\times$ 10$^{-5}$
M$_{\odot}$ and a dust temperature of $\sim$ 900 - 1200 K associated with this
rising continuum and suggest the dust has formed in SN ejecta. Utilizing the
one-dimensional multigroup radiation hydrodynamics code STELLA, we present two
degenerate progenitor solutions for SN 2021krf, characterized by C-O star
masses of 3.93 and 5.74 M$_{\odot}$, but with the same best-fit $^{56}$Ni mass
of 0.11 M$_{\odot}$ for early times (0-70 days). At late times (70-300 days),
optical light curves of SN 2021krf decline substantially more slowly than that
expected from $^{56}$Co radioactive decay. Lack of H and He lines in the
late-time SN spectrum suggests the absence of significant interaction of the
ejecta with the circumstellar medium. We reproduce the entire bolometric light
curve with a combination of radioactive decay and an additional powering source
in the form of a central engine of a millisecond pulsar with a magnetic field
smaller than that of a typical magnetar.
