Why does PH3 form a dipole dipole?

It forms dipole-dipole because it is a polar molecule. Here is why:

PH3 is called phosphine and it is quite toxic and flammable. PH3 must be polar since it is not symmetrical. PH3 has a lone pair and does not have a trigonal planar geometry--for this reason it is not symmetrical. The dipole moment of phosphine is 0.58D which is less than 1.42D for NH3.

Here is a good answer: http://www.sciencedirect.com/science/article/pii/000926148087028X

Maybe you will not be able to view the article, but the abstract states that the measured dipole moment was 0.5740 ±0.0002 Debye.

The electronegativity (EN) concept is powerful, but the numbers that you use should not be taken too literally. First of all, different EN scales exist besides the Pauling scale, and in those scales P and H do not have the same EN values as one another. Secondly, the Pauling numbers that you are citing are rounded off to one decimal place. The accepted Pauling values are 2.20 for H and 2.19 for P - which are very close to one another, but not the same.

Finally, the geometry of a molecule is usually what dictates whether or not a molecule is polar. When one or more lone pairs are present on a central atom, the VSEPR model (correctly) predicts the geometry. If the geometry is not totally symmetrical around its center, the molecule will be polar.