Hi Shannon!

Dictation has been around awhile but is still quite new to many of us in the United States. I knew nothing about it 10 years ago, and I'd been through 6 years of college/master's education courses, so not knowing much about dictation is the norm IMHO.
That being said, if you page through your Appendix in PHFHG, you will find (right before the first dictation passage) a great explanation of how to properly go about doing dictation Charlotte Mason style. I think this is oh so helpful because, frankly, there are a lot of incorrect methods being thrown around out there about how to do dictation. I know I was pretty confused about it. It is nice to know the way it is intended to be done according to its expert... Miss Charlotte Mason.
I think you could have your 9 yo PHFHG child start with Dictation Level 2, and your 10 yo start with Dictation Level 3 or 4. A good rule of thumb for proper dictation placement is if a student is having to redo 1 or possibly 2 dictation passages each week. If they are missing a passage daily, it is too hard, if they have gone several months without missing any, it's too easy. I'd start lower rather than higher, as it's easier to move forward rather than backward.
Here are some thread that will explain dictation more...
viewtopic.php?f=6&t=5661
viewtopic.php?f=6&t=5186
viewtopic.php?f=6&t=925
HTH!
In Christ,
Julie