diff --git a/crates/engine/src/cmd/annotate.rs b/crates/engine/src/cmd/annotate.rs
index b359681..9b235d4 100644
--- a/crates/engine/src/cmd/annotate.rs
+++ b/crates/engine/src/cmd/annotate.rs
@@ -322,7 +322,17 @@ fn last_linear(s: &Session) -> Option<Dimension> {
 
 /// Next dimension in a chain from `prev` to a new second origin.
 fn chained(s: &Session, prev: &Dimension, next: Vec2, baseline: bool) -> EntityKind {
-    let spacing = s.doc().ok().and_then(|d| d.dim_style(&prev.style).map(|st| st.baseline_spacing * st.scale.max(1e-9))).unwrap_or(0.38);
+    // DIMDLI × the overall scale of the dimension being continued: its overrides (SETVAR DIM*)
+    // included, and DIMSCALE 0 falling back to the drawing's DIMSCALE as when it is drawn.
+    let spacing = s
+        .doc()
+        .ok()
+        .map(|d| {
+            let st = d.dim_style(&prev.style).cloned().unwrap_or_default().with_overrides(&prev.overrides);
+            st.baseline_spacing * st.effective_scale(d.header.f64("DIMSCALE", 1.0))
+        })
+        .filter(|v| v.is_finite())
+        .unwrap_or(0.38);
     let dir = match prev.kind {
         DimKind::Linear { rotation } => Vec2::from_angle(rotation),
         _ => (prev.p14.xy() - prev.p13.xy()).normalized(),
@@ -671,8 +681,11 @@ fn run_dimspace(s: &mut Session, p: &Value) -> Result<Value> {
     let d = s.doc()?;
     let Some(EntityKind::Dimension(b)) = d.entity(base).map(|e| e.kind.clone()) else { return Err(bad("dimspace", "`base` is not a dimension")) };
     let st = d.dim_style(&b.style).cloned().unwrap_or_default().with_overrides(&b.overrides);
-    let spacing =
-        p.get("spacing").and_then(Value::as_f64).filter(|v| v.is_finite() && *v >= 0.0).unwrap_or(st.baseline_spacing * st.scale.max(1e-9) * 2.0);
+    let spacing = p
+        .get("spacing")
+        .and_then(Value::as_f64)
+        .filter(|v| v.is_finite() && *v >= 0.0)
+        .unwrap_or(st.baseline_spacing * st.effective_scale(d.header.f64("DIMSCALE", 1.0)) * 2.0);
     let dir = match b.kind {
         DimKind::Linear { rotation } => Vec2::from_angle(rotation),
         DimKind::Aligned => (b.p14.xy() - b.p13.xy()).normalized(),
diff --git a/crates/engine/tests/dim_baseline_spacing.rs b/crates/engine/tests/dim_baseline_spacing.rs
new file mode 100644
index 0000000..78fb14c
--- /dev/null
+++ b/crates/engine/tests/dim_baseline_spacing.rs
@@ -0,0 +1,48 @@
+//! DIMBASELINE spaces dimension lines by DIMDLI × the overall scale of the dimension it
+//! continues: SETVAR DIM* overrides count, and DIMSCALE 0 falls back to the drawing's DIMSCALE
+//! (issue #364). DIMSPACE's default spacing uses the same scale.
+
+use cadcraft_engine::Session;
+use cadcraft_engine::doc::{EntityKind, Handle};
+use serde_json::{Value, json};
+
+fn dim_line_y(s: &Session, h: &Value) -> f64 {
+    let h = Handle::parse_hex(h.as_str().unwrap()).unwrap();
+    match &s.doc().unwrap().entity(h).unwrap().kind {
+        EntityKind::Dimension(dm) => dm.defpt.y,
+        k => panic!("not a dimension: {k:?}"),
+    }
+}
+
+/// Spacing between a horizontal dimension with its line at y = 5 and the baseline one after it.
+fn baseline_spacing(setup: &[(&str, Value)]) -> f64 {
+    let mut s = Session::new();
+    for (cmd, p) in setup {
+        s.execute(cmd, p).unwrap();
+    }
+    let first = s.execute("dimlinear", &json!({"p1": [0, 0], "p2": [10, 0], "at": [5, 5]})).unwrap();
+    let next = s.execute("dimbaseline", &json!({"points": [[20, 0]]})).unwrap();
+    dim_line_y(&s, &next["handles"][0]) - dim_line_y(&s, &first["handle"])
+}
+
+#[test]
+fn baseline_spacing_follows_overrides_and_dimscale() {
+    let near = |a: f64, b: f64| (a - b).abs() < 1e-9;
+    let plain = baseline_spacing(&[]);
+    assert!(near(plain, 0.38), "{plain}");
+    let scaled = baseline_spacing(&[("setvar", json!({"name": "DIMSCALE", "value": 10}))]);
+    assert!(near(scaled, 3.8), "SETVAR DIMSCALE scales the spacing: {scaled}");
+    let dli = baseline_spacing(&[("setvar", json!({"name": "DIMDLI", "value": 1}))]);
+    assert!(near(dli, 1.0), "SETVAR DIMDLI sets the spacing: {dli}");
+    let zero = baseline_spacing(&[("dimstyle", json!({"name": "Standard", "DIMSCALE": 0}))]);
+    assert!(near(zero, 0.38), "DIMSCALE 0 in model space is scale 1, not a collapsed spacing: {zero}");
+
+    // DIMSPACE's default spacing (twice DIMDLI) uses the same scale.
+    let mut s = Session::new();
+    s.execute("dimstyle", &json!({"name": "Standard", "DIMSCALE": 0})).unwrap();
+    let a = s.execute("dimlinear", &json!({"p1": [0, 0], "p2": [30, 0], "at": [15, 5]})).unwrap();
+    let b = s.execute("dimlinear", &json!({"p1": [0, 0], "p2": [50, 0], "at": [25, 6]})).unwrap();
+    s.execute("dimspace", &json!({"base": a["handle"], "handles": [b["handle"]]})).unwrap();
+    let gap = dim_line_y(&s, &b["handle"]) - dim_line_y(&s, &a["handle"]);
+    assert!(near(gap, 0.76), "{gap}");
+}