So I ran into a discussion yesterday. I was attacking a Hero that has the Heavy Cloak equipped, with a cave spider.

I had a surge and the target was already poisoned, so the only good thing to do was to use the surge for damage.

The Hero player used his Heavy Cloak to cancel it, so I played a Dark Might (to add one surge). Then the hero players said that I could not trigger the gained surge to deal extra damage, as I already "triggered" that ability (on the surge that got cancelled) and on their weapons they can only use surge abilities once as well. Is that the correct way to play?

Anyway... we played on and to not loose the effects of the extra surge from Dark Might, I played Critical blow for +3.

What would be the normal timing to use the Heavy Cloak and Dark Might? In Step 2 after rolling dice or in Step 4 spend surges?

Both Dark Might and Heavy Cloak must be played in step 2 of the attack before surges are assigned to abilities in step 4. It is completely legal to play Dark Might after Heavy Coat was used to add another surge to the attack results. Only after this step is completed and range is checked (step 3) the player may decide what ability to use with any remaining surges.

Thank you for your quick reply Sadgit. T his provides me with a dilemma though, we often allow eachother (Heroes and OL) to rollback and make small corrections when either of us forgets something.

So on one hand in Step 2 I don't want to remind the hero player that he has the Heavy Cloak and he is able to cancel a surge... and on the other hand in Step 4 I would allow the hero to exhaust to cloak when he had "forgotten" it previously in Step 2:)

Why don't you roll back the attack to step 2? The only problem (at least in this example) would be that the hero players know that a Dark Might is on the OL's hand even if he does decide to not play it in the end. However, as soon as reroll abilities (always used in step 2) enter the stage, roll backs are problematic.