What is the proper form for using dialogue in a story?
When using dialogue, there are a few simple rules to follow. First of all, whenever you have a new speaker, you begin a new indented line. For example:
Indent: "Hi, I'm Joe," the boy said.
Indent: "Great to meet you, Joe. I'm Elizabeth."
Indent: "Are you going to the dance tonight, Elizabeth? I mean, will you be there with your friends?"
Indent: She looked at him quizzically, not sure how to answer. Finally, she said,
Indent: "Yeah, I'll be there. You?"
Be sure to indent each time the speaker changes, and just as importantly, be sure to punctuate correctly. Periods and commas always go inside the quotations (unless you are British!). Question marks and exclamation points can go either inside or out, depending on where the question or the emphasis is.
"Will you go to the dance with me?" (question mark inside)
How many times in the last week have you said, "He's my best friend"? (The question is from the non-quoted part (How often...) so the question mark goes outside.
Make sense? I hope so! Good luck.