After desperately searching for her among the dead, Jaws is reunited with Dolly as the space station falls apart around them. They embrace happily and Jaws opens a bottle of champagne and they drink a toast together.
It's later revealed that Jaws and Dolly survive in a part of the station that detaches from the rest of the station before its destruction. Some later dialogue says they were rescued after splashdown.
Jaws even says his first words as the section of the station re-enters Earth's gravity: "Well, here's to us."
The reason for Jaws's Heel-Face Turn? After listening to Drax's New Era Speech, he realized that Dolly would not have a place in that new world, and dammit he wasn't gonna let that happen to her!
And he likely would not have a place in it either! His turn was just as much for his sake as it was for hers.
Even the first meeting of the two is heartwarming: she helps free him from the debris after the cable car crash, they give each other the biggest (and in one case, shiniest) smile, and practically skip off hand in hand, while the orchestra plays Tchaikovsky's Love Theme from Romeo and Juliet.