Iago cursed in dismay (10)
I believe the answer is:
discourage
'dismay' is the definition.
(I know that dismay is a more specific form of the action discourage)
'iago cursed' is the wordplay.
'iago cursed' can be anagrammed to 'DISCOURAGE'.
However, I'm not clear how this is indicated.
'in' is the link.
Can you help me to learn more?
(Other definitions for discourage that I've seen before include "Deter; dishearten" , "Cause loss of enthusiasm in (someone)" , "Talk out of" , "Put off" , "Try to stop" .)