  Dust at the midplane of a circumstellar disk can become gravitationally
unstable and fragment into planetesimals if the local dust-to-gas density ratio
mu is sufficiently high. We simulate how dust settles in passive disks and ask
how high mu can become. We settle the dust using a 1D code and test for
dynamical stability using a 3D shearing box code. This scheme allows us to
explore the behavior of small particles having short but non-zero stopping
times in gas: 0 < t_stop << the orbital period. The streaming instability is
thereby filtered out. Dust settles until shearing instabilities in the edges of
the dust layer threaten to overturn the entire layer. In this state of marginal
stability, mu=2.9 for a disk whose bulk (height-integrated) metallicity is
solar. For a disk whose bulk metallicity is 4x solar, mu reaches 26.4. These
maximum values of mu, which depend on the background radial pressure gradient,
are so large that gravitational instability of small particles is viable in
disks whose bulk metallicities are just a few (<4) times solar. Earlier studies
assumed that dust settles until the Richardson number Ri is spatially constant.
Our simulations are free of this assumption but provide support for it within
the dust layer's edges, with the proviso that Ri increases with bulk
metallicity in the same way that we found in Paper I. Only modest enhancements
in bulk metallicity are needed to spawn planetesimals directly from small
particles.
