Dieter is an immigrant from Germany, as evidenced by his name and accent.
Red Dead Redemption
Dieter can normally be found in Armadillo, wandering the streets and doing a variety of odd jobs. However, he has been known to travel around New Austin and West Elizabeth.
In a random encounter, Dieter can be seen with another man packing dynamite at a wilderness camp. He warns his friend to be careful, stating that one spark will send them all up. Even if the player waits around during this encounter, neither Frommel nor his companion will do anything to cause an explosion. Unless the player picks some dynamite before the conversation ends, then Dieter's companion will light a cigarette which will cause the dynamite to go off.