I was running into this error on my digitalocean box:

FATA[0000] Error: Untar fork/exec /usr/bin/docker: cannot allocate memory

The fix for me was to add swapspace. By default my digitalocean droplet didn’t come with any swap!

dd if=/dev/zero of=/root/myswapfile bs=1M count=1024
chmod 600 /root/myswapfile
mkswap /root/myswapfile
swapon /root/myswapfile