Since this was a bit of a pain to track down, here's the process, on an Ubuntu Server 12.04 machine, to create many ALSA dummy devices:

$ cat /etc/modprobe.d/alsa-dummy.conf 
options snd-dummy enable=1,1,1,1,1,1,1,1,1,1,1,1 pcm_devs=4,4,4,4,4,4,4,4,4,4,4,4 fake_buffer=0,0,0,0,0,0,0,0,0,0,0,0
$ modprobe snd-dummy

That sample creates 48 dummy devices (on 12 cards), though that's likely more than you'll ever need.  The fake_buffer array means they should all have a real internal buffer.  The "enable" array is specifying how many cards to create.  The pcm_devs array specifies how many pcm devices to have on each card.

Note that dummy devices do not seem to work as the target of dmix.  You can use a file plugin to send the audio sent to the dummy device into a file or pipe.

[Update] The values are *all* arrays...

[Update] You likely *don't* want dummy cards, you likely want loopback cards