When I was looking through what chords I should use in the key of B minor, I realized that C sharp diminished is one of them. But C sharp diminished has a B flat in it, which isn't in the scale of B minor. Why is this?

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    C(nat) dim7 is also very useful in B minor (or B major, come to that), as a transition chord between the tonic and supertonic chords. It contains notes that are not in any forms of the B minor scale. So what? It would be ludicrous to invent a modulation within Bm - Co7 - C#m7. CHROMATIC CHORDS ARE OK. No need to even "borrow" them from anywhere. They're just OK, period. – Laurence Payne Oct 30 '16 at 23:33
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    it depends on which variant of B minor - natural/melodic minors won't contain the semitone below the tonic, but the harmonic minor will contain it – danimal Oct 31 '16 at 1:25

When we say C♯ dim. is in the key of B minor, we mean the C♯ diminished triad, which is C♯ E G. B minor is B C♯ D E F♯ G A B (note that this is natural minor), and C♯ E G is within that collection.

But, for what it's worth, that fully-diminished seventh chord is also in the key of B minor, though instead of B♭ the chordal seventh is spelled as A♯ (note that here we're using the harmonic minor collection of B C♯ D E F♯ G A♯ B). When we realize this, we suddenly spot that the chord is actually an A♯ diminished seventh chord, because when we stack thirds it's A♯ on the bottom instead of C♯.

This is because fully-diminished seventh chords are symmetrical, so we can conceptualize them as having up to four different roots. By symmetrical, I mean that the chord is constructed of three consecutive minor thirds: C♯ E, E G, and G B♭. B♭ C♯ is also a minor third, just spelled as an augmented second. This means that we can conceptualize this fully-diminished seventh chord as having any one of these four roots (and their enharmonic equivalents).

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    +1. Not wishing to criticise this answer in any way, but that chord (in various keys) could have seven different roots, rather than 'up to four'. A#, Bb, C#, Db, E, Fb, G. And since the dim 7 part could be bb, then Cbb and Abb might be added to that list. Is this true? – Tim Oct 31 '16 at 8:48

It is really like a V - I progression in a minor scale. Leads up to the tonic. C#dim is enharmonically the same as A#dim. So, if in a major scale, you would have F#7 -> B, in the minor scale you will have A#dim -> Bm.

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