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Let’s first start with what a dormer is. Sometimes when first exploring custom homes and new homes, terms are used that you might not be accustomed to. The saying is true, “The only dumb question is the one you don’t ask”. Home builders are more than happy to define things for you.

Shed dormer and gable dormer
So let’s look at dormers. Dormers are basically the out cropping on a roof that forms either a triangle shape, known as a gable dormer, or a slanted outcropping, known as a shed dormer. These outcroppings are added to the top floor rooms to add more space and usability to them. Also they are used decoratively to enhance the outside appearance of a structure.
A gable dormer is also called a dog house dormer. Personally I prefer the look of the gable dormer, but the shed dormer can yield a lot of useful space on the inside of the attic rooms. A way to add to the usefulness of a dormer is to make them wider. A 4’ wide dormer has a lot less usable space than a 12’ dormer.
When building a log home, typically all of the dormers are framed with standard construction and then they are log sided on the outside. The log siding is purchased to match the logs the home is built with. Then on the inside of the dormer 1×6 tongue and groove pine or cedar is typically installed.
The advantage of constructing a home and using the log siding on the dormer is related to shrinkage. Logs are a natural product, and even with kiln dried or dead standing logs, you still get a slight settling. Using a framed wall reduces the chances of settling as the framing halts the movement.
Log siding a framed gable or shed dormer also makes for a tighter home so that the insects and weather stays on the outside of your log castle.
What is the “Gable End” of a house? The gable end of a house is the triangle of the home in the eves of the roof. With logs which stack with a single or double tongue and groove, very commonly the solid logs are stacked to a height of approximately 105” or 14 to 15 rows of logs. Above the logs, in the gable of the home, where the log siding is utilized. Here you can see the logs ending at the top of the wall and the framed wall beginning. On the outside of the home log siding is used to give the appearance of solid log. Then on the inside of the home, very commonly 1×6 tongue and groove pine is installed, as shown on this photo. 
For a round on round log profile, also known as a double D log, with a double tongue and groove stack, it is also possible to use the log siding on the inside and the outside of the gables. This yields a solid log look inside and outside.
An advantage of using log siding is there is a lot less settling on the gables. A solid log wall all the way to the peak has more shrinkage. Typically a Swedish Cope home uses solid logs to the top of the peaks. The solid logs to the top looks really nice, but one disadvantage is the added area for shrinkage. As the logs get higher, if each log shrinks just a little, it is magnified as more logs are stacked. This sort of “accordion” effect makes for added gaps in the gables.
The reason Swedish Cope homes don’t typically have log siding on the gables is because the log siding to match this type of home is actually a full half log. Basically a log is taken and cut down the middle. So with a framed wall in the gable, there is not usually enough room for the full half log siding plus the framed wall.
Flies and insects are another concern with log homes. By using the log siding on a framed gable end it leaves the home more weather tight. Thus it also helps to seal out the bugs.
Log homes are a treasure. Through techniques such as log siding on gable ends, things such as shrinkage can be minimized and weather tightness maximized. Cheap log siding is just that, an inexpensive solution. The higher grade the log siding you purchase the more easily it will attach to the home, the better finish you will get, and the less twisting and checking the siding will have.