Dotty is sedate, showing reserve (3,5)
I believe the answer is:
set aside
'reserve' is the definition.
('set aside' can be a synonym of 'reserve')
'dotty is sedate' is the wordplay.
'dotty' indicates anagramming the letters.
'is'+'sedate'='issedate'
'issedate' anagrammed gives 'SET-ASIDE'.
'showing' acts as a link.
(Other definitions for set aside that I've seen before include "Discount" , "EU's agricultural scheme" , "Reserve for future use" , "Lay by" , "Reserve(d) in advance" .)