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When playing as a spellcaster, is it valid the use of the Ready action to prepare Dispel Magic to counter a spell cast by an opponent? In the same vein, when declaring said action, do I have to specify which spell slot I will use when Readying the Dispel Magic spell? If that is the case, does this tactic nullify an opponent's spell?

I get the impression that this is basically turning Dispel Magic into a spell with the Reaction tag. Is my reading of the rules accurate?

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You can prepare Dispel Magic to instantly dispel whatever spell a spellcaster casts. However, this will not "counter" their spell, rather, it will dispel it as soon as they cast it. So any spell with a duration of Instantaneous will be unaffected. This will only end the ongoing effects of spells which create ongoing effects.

This is not at all the same as "turning Dispel Magic into a spell with a casting time of Reaction". From the Player's Basic Rules, page 72:

When you ready a spell, you cast it as normal but hold its energy, which you release with your reaction when the trigger occurs. To be readied, a spell must have a casting time of 1 action, and holding onto the spell’s magic requires concentration (explained in chapter 10). If your concentration is broken, the spell dissipates without taking effect.

When you Ready a spell, you cast it with your action, then hold on to the cast spell until your reaction is triggered. You burn the spell slot when you ready the spell, and you have to maintain concentration until your reaction is triggered, or the spell will be wasted.

This is an extremely strange way to try to go about this, because there is a spell called Counterspell (Player's Basic Rules, page 86) which does exactly what you're looking for. It nullifies spells, including Instantaneous ones, it has a casting time of Reaction, and you choose which spell slot you cast it out of when you cast it. It's the same level as Dispel Magic and does everything you want.

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    \$\begingroup\$ The caster in question may simply not know Counterspell, and may be trying to make do. The fact that it won't work against Instantaneous spells is just a side-effect of it being pressed into service where a task-specific spell would work better if it were available. \$\endgroup\$ – Theo Brinkman Jan 27 '15 at 15:21
  • \$\begingroup\$ Page 15 of the current Sage Advice Compendium supports this when answering "Can you ready dispel magic to stop another spell from taking effect?" \$\endgroup\$ – Medix2 Jul 14 at 21:16

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