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Magnetic-susceptibility measurements have been made on dilute excess Fe alloys of the layer-structure crystals TaSe2, NbSe2, and TaS2. The 2H selenides show local-moment formation and obey a Curie-Weiss law in the range 300-30 K with effective moments in the range (2.5-4.5)μB. For 2H-FexTaSe2 a strong susceptibility maximum is observed at low temperature and at low fields the maximum has a cusplike shape characteristic of a "spin-glass" type transition. The temperature of the maximum scales approximately linearly with Fe concentration and reaches 13 K for x=0.10. The presence of the magnetic impurities decreases the onset temperature of the charge-density wave and smears the transition. At the same time the magnetic impurities can stabilize a spin-density wave and the data are reviewed in terms of such a possibility. Crystals of 2H -FexTaS2 do not show local-moment formation and the susceptibility measurements show a smearing of the charge-density wave but no depression of the onset temperature up to x=0.05. The Fe-doped 4Hb phases of TaS2 and TaSe2 show distinctly different behavior with 4Hb-FexTaS2 showing a strong-local-moment formation and a susceptibility maximum while 4Hb-FexTaSe2 shows only a weak-local-moment formation and no magnetic anomalies. The susceptibility behavior of the various phases also correlates with magnetic anomalies observed in the transport properties of the Fe-doped layer structures and these correlations will also be reviewed.