Quote Originally Posted by MysticTheurge View Post
I've never heard of any such rule.
The "dodge cap" is a part of Neverwinter Nights, a popular game that introduced many people to the D&D 3.x rules. However, I believe it was an internal programming detail of the game, and not something published in the printed manual.

For game design purposes, a dodge cap is not a good idea. It can be a partial fix if you have allowed too many sources of small dodge bonuses into the game, but it's smarter to not allow them at all (or rather, to have them with their own limitations designed with them, as with Combat Expertise or Inspire Heroics, rather than being something slapped onto a magic item).