Hey all I was just wondering how to incorporate diminished chords into my playing. Say I'm playing in E major, which contains a D#diminished triad. How would I fit that D#dim into a song and how does it fit with the other chords. I can't quite fit dim chords into my playing and I want to overcome that.

well i clicked this thread to see what other people had said, but since no one else has responded...i will say the one that first comes to mind which would be to use it right before the root chord Emaj to build tension to be relieved by the root. maybe like E A B D#dim E or something? for a simple example. also lots of diminished triads are used in heavy metal stuff, to build tension to resolve or just to add dissonance.
In general diminished chords work great in the harmonic minor scale/phrygian dominant scale (the later is a mode of the harmonic minor). Take a simple example, A harmonic minor. The notes are A B C D E F G#. If you use you can use the B, D, F, and G# diminished chords. Or you can take the diminished 7 chord. If you take the the B diminished 7 chord, it contains the notes B(root), D(flat 3rd), F(flat 5th), and G#(double flat 7th). IF you start on D, you have D(root), F(flat 3rd), G#(flat 5th), and B(double flat 7th). And the same if you start on F and G#. That is because the interval between any 2 consecutive of the diminished 7 chord, is the same. It's a minor third (4 frets). This works also on the Phrygian dominant, the fifth mode of the harmonic minor scale. In this case it's E Phyrgian Dominant. The exact same diminished 7 chords are applied. Yngwie uses these scales, and chords in his playing. He uses the chords in his sweeps. Check some of his tabs and you'll get the idea.
The harmonic minor thing is a great idea, but there's also half diminished chords, or m7b5 chords which still fit in a diatonic key. they have a flat 7, where the fully diminished chord in harmonic minor has a double flat 7 which is what makes it symmetrical. the symmetrical pattern is definitely easier for soloing, but I find it sounds bland after a while.
You can substitute a dominant chord for it's relative diminished chord, (a major third above) and if you use a fully diminished chord it can be used as a pivot point between atleast 4 diatonic keys. If you're in E major and you go to D#dim, because it's symmetrical you can look at it as having 4 possible roots and 4 possible resolutions.

I've heard Marty Friedman do some cool things just by going from minor straight to diminished, he does it somewhere in Jewel and it's beautiful
In blues on the IV chord you can go from the straight dominant up to the diminished thats a half step above it.
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Quote by guitarplaya322
In blues on the IV chord you can go from the straight dominant up to the diminished thats a half step above it.

The #ivo is function as a viio/V in the blues scale.