Hello Art. The nickel should be on top of the 7th fret and the dime should be sitting on the fretboard in the space between the nut and the first fret, flush against the first fret. Here are a couple of photos.

If the string is too high at the dime, you may need to make the nut slightly less tall by removing it and sanding a tiny bit off the bottom. If the string is too high at the nickel, you may need to sand a little off the bridge. Always go slow, and keep in mind that its a lot easier to take too much off than it is to put material back.

An important thing to note is that the dime will not be a useful reference if your instrument has jumbo fretwire, because the frets will be taller than the dime.

Sorry for the dead links. That should have been @ken-hulme and @ken-longfield

Can someone clarify the dime/nickel process. @ken_hulme said a nickle above the fretboard at the first fret, and a dime above the fret at the 7th. But @ken_longfield said a dime on the bridgeside of the 1st, and a nickle on top of the 7th.

Then, once you have determined that the action at the first fret is too high, how do you fix it? Lower the nut, or the bridge? Neither of mine are glued in, so I can do either. 

Thanks

Art

( look at the nut height and action at the first fret)

Thanks matt, you are right. the dulcimers I have that have the 0 fret, yes they are low (less then a dime) but the ones without the 0 fret have extra room above the dime. Interesting and why maybe I still felt some of my dulcimers were hard on my thumb in slides. 

Yes. It may lose a bit of volume. As to 'clearer sound', that's probably subjective.

the action (distance from fret to string) at the seventh fret is just one place on the string.  It is determined by the height of the nut (what the string rests on near the tuners) and the saddle (what the string rests on near your strumming hand).  For example, I have a twelve string guitar where the height of the nut is actually lower than the first fret.  This makes the action at the first fret very low, even though the action at the 12th fret (equivalent to the seven fret on a dulcimer) is about the height of a nickel.

Many dulcimers use what is called a -0- fret instead of a nut.  Doing so will lower the action at the first fret to less than that of a dime.  The action at the seven fret is determined by the height of the saddle for these instruments.

The ease of pressing the strings depends on the string action along the entire length of the fret board.  Most players spend 80% of their time below the seventh fret.  If you are truly looking for an instrument with easy action, look at the nut height and action at the first fret.

skip:

( smaller/thinner/lighter gage string will be easier to push down.)

So a double 10 maybe would be easier to fret (less pressure using my thumb) than a double 12, making a clearer sound?

String size and VSL. For a given VSL/tension a smaller/thinner/lighter gage string will be easier to push down. For a given size/tension a long string is easier to push down. Note that the action is dime next to the 1st fret, nickel ON the 7th fret.

If we use a nickel under the 7th fret to measure the action, what would make some dulcimers easier to fret than others - if they all have about the same nickel height in action?

Could it be just the difference in the string size or do some dulcimers brands just play better?