Voyager images of the icy satellites of Saturn, Dione and Enceladus, suggest that they may have been geologically active and are not only composed of ice. Recent observations by the Hubble Space Telescope have shown the presence of ozone at both Dione and Rhea, which also implies the presence of molecular oxygen at these bodies. Observations of Ariel, Europa, Ganymede, and Callisto indicate the presence of CO2, so its presence on the Saturnian satellites is also expected. The Cassini Plasma Spectrometer (CAPS) will provide the capability to determine the global composition of these bodies by measuring the pickup ions produced by the ionization of their sputter-produced atmospheres. We will present a model of these atmospheres and associated pickup ions and demonstrate CAPS ability to distinguish the freshly produced picked up ions from the ambient plasma. Such ions are expected to form a ring distribution that will have a uniquely different energy-angle dependence than the ambient plasma ions. In the case of Dione we expect the potential for a moderate strength interaction for which both Voyager 1 and Pioneer 11 spacecraft measured ion cyclotron waves centered on the Dione L shell and near the equatorial plane. SKR radio emissions also displayed emissions occurring at the orbital period of Dione which could indicate some intrinsic activity due to Dione. So again, something interesting may be going on at Dione. Since Enceladus, or material in orbit near Enceladus, may be the source of the E-ring, some surprises may be encountered during its close encounter with the Cassini spacecraft. In the case of Dione we will show that a wake pass at 500 km altitude is more than an order of magnitude better than an upstream pass at 500 km altitude. Pickup ion detection for minor ion species such as NH3+ is possible for 500 km altitude wake pass but not for ≈500 km altitude upstream pass at closest approach. For navigation reasons a 100 km pass is not allowed. Therefore it is essential to have a wake pass to maximize the science return for a targeted flyby with Dione. The CAPS observations when combined with magnetometer, plasma wave and energetic particle observations will allow us to estimate the source of ions into Saturn's magnetosphere due to these two bodies and to characterize the nature of the interaction with Saturn's magnetosphere.