Myotonic dystrophy type 1 (DM1) is a trinucleotide repeat disorder affecting multiple organs. However, most of the research is focused on studying and treating its muscular symptoms. On the other hand, despite the significant impact of the neurological symptoms on patients' quality of life, no drug therapy was studied due to insufficient reproducibility in DM1 brain-specific animal models. To establish DM1 neuronal model, human skin fibroblasts were directly converted into neurons by using lentivirus expressing small hairpin RNA (shRNA) against poly-pyrimidine tract binding protein (PTBP). We found faster degeneration in DM1 human induced neurons (DM1 hiNeurons) compared to control human induced neurons (ctrl hiNeurons), represented by lower viability from 10 days post viral-infection (DPI) and abnormal axonal growth at 15 DPI. Nuclear RNA foci were present in most of DM1 hiNeurons at 10 DPI. Furthermore, DM1 hiNeurons modelled aberrant splicing of MBNL1 and 2, MAPT, CSNK1D and MPRIP at 10 DPI. We tested two drugs that were shown to be effective for DM1 in non-neuronal model and found that treatment of DM1 hiNeurons with 100 nM or 200 nM actinomycin D (ACT) for 24 h resulted in more than 50% reduction in the number of RNA foci per nucleus in a dose dependent manner, with 16.5% reduction in the number of nuclei containing RNA foci at 200 nM and treatment with erythromycin at 35 μM or 65 μM for 48 h rescued mis-splicing of MBNL1 exon 5 and MBNL 2 exons 5 and 8 up to 17.5%, 10% and 8.5%, respectively. Moreover, erythromycin rescued the aberrant splicing of MAPT exon 2, CSNK1D exon 9 and MPRIP exon 9 to a maximum of 46.4%, 30.7% and 19.9%, respectively. These results prove that our model is a promising tool for detailed pathogenetic examination and novel drug screening for the nervous system.