It works like this (Word 2011):
1. You can place your custom dictionary anywhere (works great in Dropbox for use on several computers
2. Go to Spelling & Grammar > Dictionaries to get to the window called "custom Dictionaries". Here you can create a new dictionary anywhere on your computer and choose which custom dictionaries are active. The 'Language' option here associates that particular custom dictionary with a language of your choice. Select (none) to be able to use it with any language.
3. NOW THIS IS WHAT BUGS A FEW PEOPLE I THINK!
If you have associated your custom dictionary to fx 'English (UK)', then the document language must also be set to 'English (UK)', otherwise your custom dictionary is not active (and the Add button is grayed out). So in this case mark all your text (Cmd+a), go to Tools > Language and select 'English (UK)'.
4. To be able to edit/modify a custom dictionary e.g. add/remove words manually, that particular custom dictionary must not be in use by the document. So if your having problems modifying your custom dictionary you can close your document, create a New Blank Document and make sure the language are set to another language than your custom dictionary is associated to. Then you should be able to edit the custom dictionary.
This worked for me and I hope it helps a few people