The type specimen was collected in the Hoonah-Angoon Census Area, just outside the boundaries of Glacier Bay National Park, northwest of Gustavus.

The specific epithet dillmaniae honors Karen Dillman, an ecologist with the United States Forest Service, for her "outstanding contributions ... in documenting the lichen biota of south-east Alaska".

[1] The thallus of the lichen comprises olivaceous-brown, corticate, isidioid granules measuring 20–50 μm in diameter.

The granules rest on a black hypothallus that contains Nostoc-like cyanobacterial cells tightly packed with fungal hyphae, and sheathed in a gelatinous cortex-like layer.

[1] Only it has only been recorded a few times from southeast Alaska, where it grows on the bark of Alnus and Populus in lowland temperate rainforests, the authors suggest that Fuscopannaria dillmaniae is more widespread in south-east Alaska than the sparse records suggest.