This is part 2 in a series on defensive positioning, part 1 is here.
The essential difference between classic (fronting) positioning and dip d positioning is that instead of standing between your player and the disc, you stand behind them. Over the years, I have known a number of teams to use this defense successfully. The first I encountered was the 96 Pie Queens led by Arlie Stern (of Fury.) She called the defense 'contain' and they played it as their standard man-to-man. Sockeye 1.0 (95-98) played this defense in conjunction with a straight up mark, typically for the first 2-4 passes. The goal was to prevent a quick score off of the pull play by overloading the deep throw with both the defender (Dip) and the mark (straight up.) Just as with a zone transition, the defense reverted to classic positioning after the first few passes. The short CUT teams (05-08) played it as a way avoid getting hucked on.
Dip D is a more conservative defense than classic fronting. In classic fronting you are taking the under (the easier throw) and giving the out (the harder throw.) You are more likely to get a turnover on any particular pass, but you are also more likely to get scored on. The decision of which defense to use hinges on percentages. The more skilled a team, the less effective Dip D will be. Playing Dip will force a team to throw ~10 passes to go 70 yards. Playing classic will force a team to throw ~5, but at least one of them will be low percentage. A skilled team (like an elite club team) will have no trouble hitting the half-step-open cuts that Dip yields. A college team? Depends on the team. A high school team? Unlikely. A city league team? Probably not.
As an individual defender, you may want to play Dip from time to time. Are you on an island? Against a more athletic receiver? Great thrower with the disc? Offense going downwind? All these question pertain to the likelihood of getting beat deep. As that likelihood increases, you should consider playing Dip for a portion of the stall count. As those things change, your positioning changes.
Finally, a little technique. This defense can be played more or less aggressively. The bad-defense technique is to give a full step (or more) under, wait for the cutter to move and then follow them to put on the mark. I would only recommend this in two circumstances: you are way over-matched athletically or the cutter can't throw at all and you are baiting the throwaway.
Better is to play closer to your player. This will require you to be alert, to anticipate and to reposition a lot more as your player moves and sets up for their cut. In the version of Dip D I learned with Sockeye, you were close enough to touch your player's back with your chest. If they tried to go deep on you, you held your position and forced them underneath. This method requires a fair bit of technical footwork to be effective (it's easy to get turned) and legal (its easy to commit a foul) and I would not recommend it for non-competitive situations like city league.
There is a middle ground between totally passive and totally aggressive. The cushion will be a half step. The trick is anticipation and tenacity. Know when your player is going to cut; if you pay attention, they'll tell you. Begin moving with them. Once they commit to their cut (usually ~4-6 steps in), commit to defending it and fly to the point of the catch. If it is a bad throw, recognize and block it. If it is a good throw, recognize and get the mark on.
To recap: This is a good team d if you are playing in a situation that is pretty low percentage. This is a good individual d if you think you are going to get beat deep. Like any defense, it is best if executed with anticipation and energy.