Despite contemporary research calls for promoting learners' feedback dialogue, how feedback dialogue occurs and contributes to learners' uptake has been little addressed. This study on 28 pairs of EFL undergraduates attempts to explore the process of feedback dialogue, its potential and the main factors affecting it. The data collected from learners' screencast records of feedback dialogue archived in Blackboard Collaborate Ultra, first and final essay drafts in Google Docs, notes on students' screencast dialogue and follow-up interviews were analyzed. Findings illustrate that learners engaged in multidirectional (writer-writer, writer-non-writer and writer-teacher) and bimodal (oral/voice and written) dialogue and negotiations. The observed and perceived potential of feedback dialogue is realized through learners' understanding of feedback, revising and enhancing their writing and learning how to give feedback as well as reducing instructor's time in giving feedback. Yet, learners' engagement in dialogue varied among the pairs from high to moderate/partial and low. Factors behind this variation are learner-related, teacher feedback formulation-related, learner-pairing and grouping-related as well as technical issue-related.