Give each character his own paragraph in the dialogue and start the paragraph with an indent. When you include a description of a character's actions, put that description in the same paragraph as his spoken lines, whether the description precedes or follows the speech. Enclose the quotes with quotation marks. For example:
"Come, Watson, come! The game is afoot. Not a word! Into your clothes and come!"
"Very well, Holmes." I pulled on my waistcoat and followed him.
Use attribution tags to identify the speaker. An attribution tag is a phrase such as "he said," "Holmes cried," or "we exclaimed." You can place the attribution tag at the beginning, end or middle of a spoken line. For example:
"Come, Watson, come!" he cried. "The game is afoot. Not a word! Into your clothes and come!"
"Very well, Holmes," I mumbled, barely awake. I pulled on my waistcoat and followed him.
Replace a period that precedes an attribution tag with a comma. Use a comma after any attribution tag that precedes a quote. Omit attribution tags whenever they do not provide extra information. When it is obvious who is speaking, or the tag's verb does not elucidate the speaker's delivery, feel free to present the spoken lines alone. The following are legitimate ways of constructing a dialogue paragraph:
He cried, "Come, Watson, come! The game is afoot."
"Come, Watson, come!" he cried. "The game is afoot."
"Come, Watson, come! The game," he cried, "is afoot."
"Come, Watson, come! The game is afoot," he cried.