Ruffing Losers in Dummy: Counting Extra Tricks
A ruff in the hand with fewer trumps is an extra trick. Count how many you need and take them before drawing all of dummy's trumps.
In a suit contract your long trump hand will make its trumps anyway. Ruffing in the long trump hand gives you nothing extra. Ruffing in the short trump hand, usually dummy, makes trumps that would otherwise just follow suit. Each of those ruffs is an extra trick.
Why it works
If declarer has five trumps and dummy three, drawing three rounds uses dummy's trumps to follow suit. They win nothing. Use a dummy trump to ruff a loser instead and it wins a trick of its own, while declarer's five trumps still make five tricks.
A worked example
You are in 4♠. West leads the ♥Q.
Dummy (North): ♠ 8 6 4 ♥ A 7 5 3 ♦ 6 ♣ K 9 7 5 2 (7 HCP)
Declarer (South): ♠ A K Q J 5 ♥ K 6 4 ♦ A 8 4 3 ♣ 8 (17 HCP)
Count your sure tricks: five spades, ♥A K and ♦A make eight. You need two more. You have three small diamonds, and dummy has a singleton diamond and three trumps. Two diamond ruffs in dummy give you ten.
Win the ♥K, cash the ♦A and ruff a diamond with a small spade. Ruff a club back to your hand, which costs nothing because your hand has spades to spare. Then ruff another diamond in dummy, ruff a second club back to hand with a high spade, and only now draw trumps. Your hand's five trumps make five tricks and dummy adds two ruffs: ten tricks.
If you drew three rounds of trumps first, dummy would have no trumps left and you would be stuck on eight tricks plus whatever else turns up.
Four common mistakes
Drawing trumps automatically and leaving no trumps in dummy to ruff with.
Ruffing in the long trump hand and counting it as an extra trick.
Forgetting to plan the entries you need to get back to hand between ruffs.
Ruffing low when a defender may overruff. When you can afford it, ruff high.
When the rule does not apply
If the defenders lead trumps at every chance, you may not have time for all your ruffs, so take them early. If you have enough tricks without ruffing, draw trumps first so the defenders can't ruff your winners. And when dummy has the longer, stronger trumps, it can be better to ruff in your own hand instead (a "dummy reversal"), which is a different technique.
Key takeaways
Only ruffs in the short trump hand create extra tricks.
Count sure tricks first, then count the ruffs you need.
Take the ruffs before dummy's trumps are drawn.
Plan your entries back to hand before you start.