BHFHG includes Spelling List 2 and Level 2 of dictation, and PHFHG includes Levels 2, 3, and 4 of dictation.

We used R & S Spelling with Wyatt, along with dictation, and eventually dropped R & S Spelling. He had just passed his R & S Spelling test and then misspelled 2 of the words that had been on the test wrong within his own writing. I asked him about it, and he said "I just pass the test and forget those, Mom, but that dictation stuff is harder - that I have to really think to do".

As a former Spelling Power and R & S Spelling user, it was tough for me to let go of the "lists", but I decided to give it a year of just doing dictation to see what happened. 3 years and counting - I have not gone back to the lists. Dictation has improved Wyatt's spelling so much, but it has been gradually over the years of doing it. He now tests far above grade level in this area on standardized testing, which he used to test average or below. You have to know, but I'd encourage you to give dictation a try solo rather than doubling up unnecessarily - I think you'd be surprised at the fruit.
Also, I used to "help" when my dc were doing dictation, and it was no help at all really.

For example, I'd say as they were beginning to write, "Hmmmm, I think you've forgotten something at the beginning" (which they knew meant they'd forgotten to indent).

I also would give hints, like, "Hmmmm, I think you may want to look at that word again" (which they knew meant they'd misspelled it).

I stopped doing this when I realized they were never correcting those habits but were rather depending on me to hint at the errors and give them second chances to fix them. Since I've stopped "helping", their writing has improved across the board in every area.

I share this only to guard other moms against the tendency to want to be "helpful", but I know this could very well be just a thing I struggled with.
I think I'd start your ds in Level 2 and see how it goes. If it's super easy, I'd fast forward to Passage 50 of Level 2, and see how that goes. If that's super easy, then I'd put him in Level 3. For dd, I'd start with Level 3 and do the same, if she's flying through, she could start Level 4.

HTH!
Here are some other threads about dictation, in case they are helpful...
viewtopic.php?f=6&t=5661
viewtopic.php?f=6&t=5186
In Christ,
Julie