  We performed numerical simulations of the common envelope (CE) interaction
between two intermediate-mass asymptotic giant branch (AGB) stars and their
low-mass companions. For the first time, formation and growth of dust in the
envelope is calculated explicitly. We find that the first dust grains appear as
early as $\sim$1-3 yrs after the onset of the CE, and are smaller than grains
formed later. As the simulations progress, a high-opacity dusty shell forms,
resulting in the CE photosphere being up to an order of magnitude larger than
it would be without the inclusion of dust. At the end of the simulations, the
total dust yield is $0.0082~M_{\odot}$ ($0.022~M_{\odot}$) for a CE with a
$1.7~M_{\odot}$ ($3.7~M_{\odot}$) AGB star. Dust formation does not
substantially lead to more mass unbinding or substantially alter the orbital
evolution.
