Can I add a reference to a .NET Framework DLL from a .NET 5 project?

It will be the same as today: you will be able to reference .NET Standard libraries. .NET 5 does not contain everything of the classic framework, therefore it won't be possible to reference a .NET 4.x assembly directly. Therefore start to write libraries in .NET Standard.

However in .NET Core 2.0 Microsoft implemented the compatibility shim that allows type forwarding of missing tpyes in old assemblies to the new type. As long as your library does not use any classes that are not supported by .NET 5, you're safe.

See this post or this for more information.

.NET 5 will have the same compatilbity layer that .NET Core currently has.

This allows you to reference .NET Framework DLLs with the caveat that the DLL may not load or execute at runtime. If it is a logic library, it may work well. Not so much if it relies on e.g. System.Web. This is especially useful for 3rd party libraries which you don't have the source code for. You can use the The .NET Portability Analyzer to check for any use of unsupported APIs in such libraries.

That being said, you should try to change your existing .NET Framework libraries to .NET Standard or multi-target to both .NET Framework and .NET Standard.

This is a great question and one that I've spent a fair amount of time trying to answer for myself. One thing that really helped me was to realize that .NET 5.0 is really just the next version of .NET Core.

This video at the 24:30 mark really makes this point well: https://youtu.be/4WJHCvwE2VM?t=1470

With that in mind we can see that things will continue to work as they do in .NET Core 2.0 and earlier where if you want to make use of classic .NET Framework code, then you must first move that code into a .NET Standard class library.