An apparatus is provided herein for dilating bodily tissue and for monitoring neural activity in the distracted bodily tissue. In one aspect of the invention, the apparatus includes a first dilator having a tubular body with a distal end, a proximal end, and at least one electrode mounted about a circumference thereof； and, a second dilator having a tubular body of electrically-insulative material, the tubular body having a distal end, a proximal end, and a lumen extending therebetween sized to permit the second dilator to subsequently telescopically slide over the first dilator and come into overlapping coaxial alignment with the first dilator. A discrete window is formed through the tubular body, at or near the distal end, in communication with the lumen. With the second dilator being in overlapping coaxial alignment with the first dilator, the window is located to come into registration with at least one electrode such that, upon rotation of the second dilator relative to the first dilator, the window is positionally adjustable about the circumference of the first dilator. Advantageously, in addition to detecting the proximity of a nerve to the first dilator, the apparatus permits determination of the direction of the nerve from the first dilator. This facilitates more efficient re-positioning of the apparatus for avoidance of nerves, if a new path is necessary.
