Then you select the region between the two edits
Select Video->feather edits to commence the dissolve operation. This asks you for a number of frames to extend the dissolve. With the number of frames entered, you now get a dissolve when you play the selection. To remove the dissolve go back to Video->feather edits and enter 0 for the frame duration.
The Feather edits operation is identical to if you created the following timeline and instead of cutting the bottom scene when the top scene began, fading out the bottom scene after the top scene began.