From what i can contribute, I think diminished chords and could be use as passing chord to a destination.
For example: here is the cromatic scale:Do,Di,Re,Ma,Mi,Fa,Fi,So,Zi,La,Ta,Ti,Do
So if you want to move to a "Re"(a Two chord) you can first go to the Di and then the Re
If you want to Move to a "Soh"(a Five chord) you can first go to the Fih and then to Soh etc
Another way I Use Diminished is to mix it with the chord inversions but I thing The one i explained already is ok.
have a nice day.