This topic came up at our seminar in the midst of the tune “Avalon.”
Many folks don’t know what a ‘half-diminished’ chord is. Before I explain it, let me teach you an easy way to play one: In standard tuning, play a simple first-position D-minor chord at the end of the neck – first position. Slide this shape three frets up the neck to the 4th/5th/6th frets, maintaining the open D in the bass. Voila! You are now playing a D-half diminished, also known as a Dm7flat5. (Don’t include the open fifth and sixth strings!)
These chords are often used as the II chord in a minor key, or as a substitute for a V7 chord, resolving to I. (Dm to Dm7flat5 to C, for instance.)
Try this in two other places also:
1) Fret a Dm chord at the 5th/6th/7th frets on the three treble strings (a diagonal shape: first string/5th, second string/6th. third string/7th), moving the same shape up to Dm7flat5 at the 8th/9th/10th frets.
2) Fret Dm again, this time as a 10th-fret, three-string barre. Move the shape up three frets to a 1/2 barre at the 13th fret. This works at the 1st fret as well! Maintain the open D string in the bass for these. Again, don’t include the open fifth and sixth strings.
Try resolving these Dm7flat5 chords to a Cmajor7th chord.
More later. Have fun!