The best way to determine where your students place in Spelling Wisdom is to download a sample (I’d suggest book 1 and 2). Looking at the first couple of lessons on each sample, you’ll need to decide if your student is familiar with most of the words within the lesson. If there are 3-4 words they are unfamiliar with, you have most likely found where they should be placed.
I would encourage you to not hit the ground running with dictation. When a student is just starting out with dictation, it is suggested that they transcribe several lessons. This means rather than looking at a word and transferring the word to paper, they look at the passage and commit 2-3 words to memory and then transfer those 2-3 words to paper. Gradually they are able to build the ability to remember complete phrases and sentences.