Gracie was originally scheduled to test Mirko Cro Cop's ground game in a special grappling bout, but the Croatian striker withdrew due to nagging injuries.
Alavutdin's original opponent, Alexandre "Cacareco" Ferreira, left the card this week due to issues securing a visa.
Gracie is 1-0 in MMA, having submitted pro wrestler Katsuyori Shibata with an armbar at a K-1 Hero's event last July.
Gadzhiyev is riding a seven-fight win streak after suffering his sole loss in his MMA debut. The Russian finished four of his five fights by strikes while competing for Pancrase. His most recent win was a head-turning knockout while mounted by Hikaru Sato at the Pancrase Shining Tour event on March 26.
Here is the complete card for "DREAM 4: Middleweight Grand Prix 2008 2nd Round" from the Saitama Super Arena:
Middleweight Grand Prix
Gegard Mousasi vs. Dong-Sik Yoon
Kazushi Sakuraba vs. Melvin Manhoef
Zelg Gelasic vs. Taiei Kin
Jason "Mayhem" Miller vs. Ronaldo "Jacare" Souza
Lightweight Grand Prix
Shinya Aoki vs. Katsuhiko Nagata
Alistair Overeem vs. Tae Hyun Lee
Alavutdin Gadzhiyev vs. Ralek Gracie
Hideo Tokoro vs. Darren Uyenoyama