Models.py
# Create your models here.
from django.db import models

class Menu(models.Model):
    name = models.CharField(max_length = 100)
    
    def __unicode__(self):
        return self.name

class Item(models.Model):
    menu = models.ForeignKey(Menu)
    name = models.CharField(max_length = 100)
    url = models.CharField(max_length = 100)
    order = models.IntegerField(blank = True, null = True)
    
    def __unicode__(self):
        return self.name
    
    class Meta:
        ordering = ('order',)

---------------------------------------*********--------------------
View.py
from django.shortcuts import render_to_response, get_list_or_404

from dragdrop.ordering.models import *

def dragdropView(request):
    items = Item.objects.all()
    return render_to_response("login.html",{'items':items});

def reorder(request):    
    orderlist = request.POST.get('order','').split('li2_')    
    i = 1
    for each in orderlist:        
        if(len(each) > 1):                    
            if(each[each.rfind(',')+1:len(each)] != ''):
                item = Item.objects.get(name = each[each.rfind(',')+1:len(each)])                
                item.order = i
                item.save()
                i = i+1
    dragdropView(request);

-----------------------------------------
HTML Template --Name is login.html


<script type="text/javascript" src="/static/js/yahoo-dom-event/yahoo-dom-event.js" ></script>
    <script type="text/javascript" src="/static/js/animation/animation-min.js"></script>
    <script type="text/javascript" src="/static/js/dragdrop/dragdrop-min.js" ></script> 
    <script type="text/javascript" src="/static/js/utilities/utilities.js" ></script>  
	

</head>

<style type="text/css">

/*div.workarea { padding:10px; float:left }*/

ul.draglist { 
    position: relative;
    width: 200px; 
    height:240px;
    background: #f7f7f7;
    border: 1px solid gray;
    list-style: none;
    margin:0;
    padding:0;
}

ul.draglist li {
    margin: 1px;
    cursor: move;
    zoom: 1;
}

ul.draglist_alt { 
    position: relative;
    width: 200px; 
    list-style: none;
    margin:0;
    padding:0;
    /*
       The bottom padding provides the cushion that makes the empty 
       list targetable.  Alternatively, we could leave the padding 
       off by default, adding it when we detect that the list is empty.
    */
    padding-bottom:20px;
}

ul.draglist_alt li {
    margin: 1px;
    cursor: move; 
}


li.list1 {
    background-color: #D1E6EC;
    border:1px solid #7EA6B2;
}

li.list2 {
    background-color: #D8D4E2;
    border:1px solid #6B4C86;
}

#user_actions { float: right; }

</style>




<script type="text/javascript">

(function() {

var Dom = YAHOO.util.Dom;
var Event = YAHOO.util.Event;
var DDM = YAHOO.util.DragDropMgr;

//////////////////////////////////////////////////////////////////////////////
// example app
//////////////////////////////////////////////////////////////////////////////
YAHOO.example.DDApp = {
    init: function() {

        var rows=3,cols=2,i,j;
        for (i=1;i<cols+1;i=i+1) {
            new YAHOO.util.DDTarget("ul"+i);
        }

        for (i=1;i<cols+1;i=i+1) {
            for (j=1;j<rows+1;j=j+1) {
                new YAHOO.example.DDList("li" + i + "_" + j);
            }
        }

        Event.on("showButton", "click", this.showOrder);
        Event.on("switchButton", "click", this.switchStyles);
    },

    showOrder: function() {
        var parseList = function(ul, title) {
            var items = ul.getElementsByTagName("li");
            //var out = title + ": ";
            var out = "";
            for (i=0;i<items.length;i=i+1) {
                out += items[i].id + ","+items[i].title;
            }
            return out;
        };

        var ul1=Dom.get("ul1"), ul2=Dom.get("ul2");
        //alert(parseList(ul1, "List 1") + "\n" + parseList(ul2, "List 2"));
		  return parseList(ul2, "List 2");
    },

    switchStyles: function() {
        Dom.get("ul1").className = "draglist_alt";
        Dom.get("ul2").className = "draglist_alt";
    }
};

//////////////////////////////////////////////////////////////////////////////
// custom drag and drop implementation
//////////////////////////////////////////////////////////////////////////////

YAHOO.example.DDList = function(id, sGroup, config) {

    YAHOO.example.DDList.superclass.constructor.call(this, id, sGroup, config);

    this.logger = this.logger || YAHOO;
    var el = this.getDragEl();
    Dom.setStyle(el, "opacity", 0.67); // The proxy is slightly transparent

    this.goingUp = false;
    this.lastY = 0;
};

YAHOO.extend(YAHOO.example.DDList, YAHOO.util.DDProxy, {

    startDrag: function(x, y) {
        this.logger.log(this.id + " startDrag");

        // make the proxy look like the source element
        var dragEl = this.getDragEl();
        var clickEl = this.getEl();
        Dom.setStyle(clickEl, "visibility", "hidden");

        dragEl.innerHTML = clickEl.innerHTML;

        Dom.setStyle(dragEl, "color", Dom.getStyle(clickEl, "color"));
        Dom.setStyle(dragEl, "backgroundColor", Dom.getStyle(clickEl, "backgroundColor"));
        Dom.setStyle(dragEl, "border", "2px solid gray");
    },

    endDrag: function(e) {

        var srcEl = this.getEl();
        var proxy = this.getDragEl();

        // Show the proxy element and animate it to the src element's location
        Dom.setStyle(proxy, "visibility", "");
        var a = new YAHOO.util.Motion( 
            proxy, { 
                points: { 
                    to: Dom.getXY(srcEl)
                }
            }, 
            0.2, 
            YAHOO.util.Easing.easeOut 
        )
        var proxyid = proxy.id;
        var thisid = this.id;

        // Hide the proxy and show the source element when finished with the animation
        a.onComplete.subscribe(function() {
                Dom.setStyle(proxyid, "visibility", "hidden");
                Dom.setStyle(thisid, "visibility", "");
            });
        a.animate();
    },

    onDragDrop: function(e, id) {

        // If there is one drop interaction, the li was dropped either on the list,
        // or it was dropped on the current location of the source element.
        if (DDM.interactionInfo.drop.length === 1) {

            // The position of the cursor at the time of the drop (YAHOO.util.Point)
            var pt = DDM.interactionInfo.point; 

            // The region occupied by the source element at the time of the drop
            var region = DDM.interactionInfo.sourceRegion; 

            // Check to see if we are over the source element's location.  We will
            // append to the bottom of the list once we are sure it was a drop in
            // the negative space (the area of the list without any list items)
            if (!region.intersect(pt)) {
                var destEl = Dom.get(id);
                var destDD = DDM.getDDById(id);
                destEl.appendChild(this.getEl());
                destDD.isEmpty = false;
                DDM.refreshCache();                
            }
            var obj = YAHOO.example.DDApp.showOrder();
            //alert(obj);
            YAHOO.util.Connect.setDefaultPostHeader(false);
            YAHOO.util.Connect.asyncRequest("POST", "../reorder/", callback, "order="+obj);
				            

        }
    },

    onDrag: function(e) {

        // Keep track of the direction of the drag for use during onDragOver
        var y = Event.getPageY(e);

        if (y < this.lastY) {
            this.goingUp = true;
        } else if (y > this.lastY) {
            this.goingUp = false;
        }

        this.lastY = y;
    },

    onDragOver: function(e, id) {
    
        var srcEl = this.getEl();
        var destEl = Dom.get(id);

        // We are only concerned with list items, we ignore the dragover
        // notifications for the list.
        if (destEl.nodeName.toLowerCase() == "li") {
            var orig_p = srcEl.parentNode;
            var p = destEl.parentNode;

            if (this.goingUp) {
                p.insertBefore(srcEl, destEl); // insert above
            } else {
                p.insertBefore(srcEl, destEl.nextSibling); // insert below
            }

            DDM.refreshCache();
        }
    }
});

Event.onDOMReady(YAHOO.example.DDApp.init, YAHOO.example.DDApp, true);

})();

var callback = {
  success: function() { /*alert("OK");*/ },
  failure: function(response) { /*alert("Failure occured. " + response.status);*/ }
}

</script>




<body style="vertical-align: middle; height: 100%;" class="login-bg">   
    
    <div class="workarea">
 <!--  <h3>List 1</h3>
  <ul id="ul1" class="draglist">
    <li class="list1" id="li1_1">list 1, item 1</li>
    <li class="list1" id="li1_2">list 1, item 2</li>
    <li class="list1" id="li1_3">list 1, item 3</li>
  </ul> -->
</div>
<div class="workarea">
  <ul id="ul2" class="draglist" >
  <li	></li>
  {% for each in items%}  
  <li class="list2" id="li2_{{each.order}}" title= "{{each.name}}" ><div>{{ forloop.counter}} <table><tr><td>{{each.name}}</td></tr></table> </div></li>
  {% endfor %}
  </ul>
</div>
<!-- <div id="user_actions">
  <input type="button" id="showButton" value="Show Current Order" />
  <input type="button" id="switchButton" value="Remove List Background" />
</div> -->
</body>

</html>


-------------------------------------------------------
Fixures

[

    {
	"model": "ordering.Menu",
	"pk": 1,
	"fields": {
		"name": "Project Management"
	}
    },

    {
	"model": "ordering.Menu",
	"pk": 2,
	"fields": {
		"name": "E-Mail"
	}
    },

    {
	"model": "ordering.Item",
	"pk": 1,
	"fields": {
		"menu": "1",
		"name": "First",
		"url": "abc.com",
		"order":"1"
	}
    },
    {
	"model": "ordering.Item",
	"pk": 2,
	"fields": {
		"menu": "1",
		"name": "Second",
		"url": "abc.com",
		"order":"2"
	}
    },
    {
	"model": "ordering.Item",
	"pk": 3,
	"fields": {
		"menu": "1",
		"name": "Third",
		"url": "abc.com",
		"order":"3"
	}
    }
]

----------------------------------------------------------------
DownLoad this from YUI- Library: 
Copy these folders from build directory of YUI library.

1. animation
2. dragdrop
3. utilities
4. yahoo-dom-event

------------------------- This will work fine -----------------