Debugging a DLL in Delphi 5

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This is done by setting a host application and choosing Delphi 5 (delphi32.exe) itself as the host application. Theoretically very easy - available since Delphi 3.
But there are two catches:
It seems that

• the DLL has to be in the same directory as its DPR file (in other words: don't have a separate output directory)
  
• your project path should not contain dirctories with a space in the name. There seems to be a problem with debugging DLLs with spaces in the project path.
  

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