Tip supplied by Jeremy Hall

Here's a simple way to create dotted lines. The best part of this technique
is that it takes advantage of some simple, built-in settings for the brushes, unleashing a ton of possibilities. No other programs needed and no fancy channels handiwork, er, mouse-work that is.

Here's the final product, in simple form. Let's get started. Open a new
document, any size with a little width, say 200 wide and any height.

First, choose the pencil tool to make sure the settings apply to this set of
brushes. Before doing anything else, be sure to save your brushes if you have a fancy set of already tampered with brushes. You will be playing with the settings and it is always nice to be able to load your previous set.

Double-click on the second smallest brush in the pallette window. Your
pallette should look rough as we are working with the pencil tool. The smoother brush version will come later...

You are now viewing the brush options. The important change to make
for the dotted line effect is the spacing. For the simple dotted line I created above, simply change the Spacing option to 250%. You can change this to any setting up to 999, but for now just try out what I used.

Now, simply draw with your pencil and you have your dotted line! To make
sure your line is straight, hold down the shift key while you draw the line. Another technique is to single-click your starting point and then while holding the shift key, single-click your ending point; PS draws the dotted line between the two points!

For a few variations try differing the size of the brush and increasing the
spacing. Also, you can load a square set of brushes from the Adobe Photoshop>Goodies>Brushes & Patterns>Square Brushes which gives you square dots using the same options. Switch over to the Paintbrush and see that the same effect is created, only with smoother anti-aliased dots. All of the same options also apply to the Airbrush tool as well.

Along with the size and spacing of the dots, if you need to do dotted
lines with an oblong shape that are on an angled line (whew!), simply change the angle of the brush. Just like a caligraphy pen, you can change the angle of the stroke of your brush; but, in this case it changes the direction of the dot in your line. Now you are an expert at PhotoShop dotted lines!