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"Dry rot" is a misleading term, since it gives the impression that the wood deteriorated in the absence of moisture. Some folks think that the heat of an attic can cause wood to suffer from this elusive "dry" rot. Sorry, there is no such thing as... DRY rot.
ALL wood decay is caused by one of a variety of wood-infesting fungi. That's right… second cousins once removed to our bathroom nemesis, mildew! The fungus occurs naturally and becomes established within the fibers of the wood if, and only if the wood is damp for a long period of time. Around the home, the typical situations for breeding a healthy crop of wood rot fungus are leaks in roofs, water getting trapped between wood and concrete (such as behind poured concrete steps), wood siding that is too close to the ground, siding shaded by or in contact with overgrown greenery and wooden posts that have not been treated with a rot-resisting preservative.
The fungus is very resilient and can survive with little or no moisture for a long time… sometimes years… only to become activated again upon contact with water. Fortunately, the growth of the fungus ceases if its water supply is cut off. Once a roof leak is repaired, for example, the progression of the wood rot will stop. Unfortunately, the wood will not heal… the decay is permanent.
Now here is the sneaky part. If you were to take down a wall in the area of that OLD leak, what you might find is perfectly dry but rotten wood… soft and brittle as can be. Though your first reaction might be "Ugh! Look Harry… DRY ROT!". In reality the rot occurred totally while the wood was wet.