This paper reports the application of ligand-field electronic absorption spectroscopy to probe Co2+ dopant ions in diluted magnetic semiconductor quantum dots. It is found that standard inverted micelle coprecipitation methods for preparing Co2+-doped CdS (Co2+:CdS) quantum dots yield dopant ions predominantly bound to the nanocrystal surfaces. These Co2+:CdS nanocrystals are unstable with respect to solvation of surface-bound Co2+, and time-dependent absorption measurements allow identification of two transient surface-bound intermediates involving solvent-cobalt coordination. Comparison with Co2+:ZnS quantum dots prepared by the same methods, which show nearly isotropic dopant distribution, indicates that the large mismatch between the ionic radii of Co2+ (0.74 Angstrom) and Cd2+ (0.97 Angstrom) is responsible for exclusion of Co2+ ions during CdS nanocrystal growth. An isocrystalline core/shell preparative method is developed that allows synthesis of internally doped Co2+:CdS quantum dots through encapsulation of surface-bound ions beneath additional layers of CdS.