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I have a desktop without wireless network card running Windows 7 and a Wifi dongle Reliance Netconnect.

My PC has an internet connection through ethernet. I want to use dongle as Wifi hotspot so that I can use internet on my Android phone. Is it possible? If so then how?

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While I believe this to be a duplicate of a large number of questions, I couldn't find a single one with a satisfactory answer.

So I'll quote from this article:

Manually create a virtual AP with netsh

If you want to experiment with the wireless Hosted Network feature with text commands, click the Start button, enter “cmd” and hit Enter. Once the Command Prompt window appears, you can enter the following to set the network details:

netsh wlan set hostednetwork mode=allow ssid=YourVirtualNetworkName key=YourNetworkPassword

Of course, replace the SSID and key placeholders with your desired network name and WPA2-PSK encryption key.

Before you enable the Hosted Network, you can configure the real network adapter to share its Internet access using the Internet Connection Sharing (ICS) feature of Windows. This way people connecting to the virtual AP will receive Internet access. You can leave the Command Prompt open so you can start the Hosted Network later.

To enable ICS, navigate through the Control Panel or Network and Sharing Center to bring up the Network Connections window. Then right-click the network adapter that’s connected to the Internet and select Properties. Then select the Sharing tab, check the Allow other network users to connect through this computer’s Internet connection, choose the Hosted Network Connection from the drop-down listbox, and click OK.

Now return to the Command Prompt and enter the following to enable the Hosted Network:

netsh wlan start hostednetwork

To manually turn the Hosted Network off, enter the following:

netsh wlan stop hostednetwork

To see the Hosted Network details (see Figure 3), including the MAC addresses of connected users, enter the following:

netsh wlan show hostednetwork

To change the WPA2-PSK key, you can enter the following:

netsh wlan refresh hostednetwork YourNewNetworkPassword

Now others nearby should see the Hosted Network appear in their list of available wireless networks. They can connect like normal and enter the encryption key when prompted.

Remember, you’ll have to manually start the Hosted Network again, if desired, after rebooting the computer. Most importantly, remember sharing isn’t blocked; make sure you only invite people you trust.

If I remember correctly, this doesn't work with some older WiFi chipsets, so it might depend on the chipset in the WiFi dongle. There should be no difference between a USB WiFi card (external) and a PCI WiFi card (internal).

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