Open System Preferences and click on the Dictation & Speech pane. There, you'll find a checkbox for Use Enhanced Dictation. The first time you check it, you'll need to wait out a hefty (about 750 MB) download, but once you're done, you can dictate a lot more freely.

Now, transcription happens on your Mac (not Apple's servers), and you can see the transcription appear as you speak, in real-time. In fact, the cursor remains active too; if you see a mistake, you can click around (without speaking) to make your edits, put the cursor back where it needs to be, and start talking again.

OS X Mavericks also offer many speech-based editing tricks. While you cannot delete - if you say "delete that" OS X Mavericks types "delete that" - you can do quite a bit of other editing such as new line, new paragraph, plus tons of other symbols, spaces, capitalization and more. Here is Apple's KB article with a detailed list of dictation commands.