Dodge and Parry have separate DR. DR Kicks in at fairly low levels of each, but has a very small effect, with the effect increasing as levels of dodge and parry increase.
Diminishing Returns start happening the minute you get 1 dodge rating or 1 parry rating. They're not a thing that magically happen at a magic number. They're ALWAYS there. 1%-2% avoidance requires less rating than 4-5% avoidance, which requires less rating than 11-12% avoidance, etc.
They're ALWAYS there.
EDIT: Also, Dodge and Parry have the same diminishing returns in Cata now. Try and get Dodge and Parry ratings to the same amount through reforging/gemming (RATINGS, not percentage)
To get 5% diminished dodge, you need roughly 5.07% undiminished dodge.
To get 10% diminished dodge, you need roughly 10.79% undiminished dodge.
To get 20% diminished dodge, you need roughly 24.74% undiminished dodge.
To get 40% diminished dodge, you need roughly 70.05% undiminished dodge.
To get 80% diminished dodge, you need roughly 830% undiminished dodge. (this is over the cap, just included for math-fun)
So, to get double the avoidance comparing 5->10 with 10->20 you need 6.2% more dodge rating per % of dodge to double your avoidance. comparing 10->20 to 20->40 the difference is a lot worse since you now need 23% more dodge rating per %. And just to take it to the extreme compaing 20->40 with 40->80 you would need 318% more dodge rating per %.
If you see "Dodge Rating" and calculate "Dodge%" from it, you will get "undiminished dodge".
The forumla for diminished dodge (as stated in the wowwiki article) is this for DKs:
Dd = dimnished dodge, Ud = undiminished dodge
Dd = ( 88.129021 * Ud ) / ((0.956 * 88.129021) + Ud)
Since dodge and parry share the same number, the calculation is the same for both of them.
The % of the two differs because dodge is also gained from agility which has a separate diminishing return (as far as I know).