Like others have mentioned, in our home dictation isn't spelling. The one I have doing dictation uses a word bank that I write on a white board for her. Her main problem is remembering the exact words used. For example, last week's dictation used the word "smaller" and she wrote "littler." If she's worried about spelling, the passage leaves her head completely. I mix up the order of words in the word bank, and I've begun adding random words, as well as some words that are similar in spelling, or the same words either pluralized/singularized or a change in tense. This frees her from spelling paralysis and let's her focus on keeping the passage in her mind.