The dodge % is not hardcapped, but does have diminishing effect.
Some dex equations I've developed that are 100% accurate:
From 1 to 100 Dex, your dodge % is .1*(Dex)
From 100 to 500 Dex, your dodge % is .025*(Dex)+7.5
From 500 to 850? Dex, your dodge % is .0202*(Dex)+9.9
Above that I stopped calculating, but until these points the equations are clearly linear functions that vary depending on your total dex.
Items and skills that add to dodge % are applied to this base value by multiplying the bonus by your remaining chance to be hit, and adding that value to your base dodge.
For example, my Barbarian with 371 Dex has 16.8% base dodge, meaning 83.2% of attacks will hit. Using War Cry (+15% dodge) will add 12.48% to the base dodge chance (83.2 * 15%). dodge bonuses continue to be applied toward your remaining chance to be hit.