I've built an anagram solver in Python 2.7. It goes through a text file with over 100,000 words and checks if any permutations of the input matches the line. It works great, except it is very slow. I've tried making the text file a list with each line as a list item, but the text file is too big to do that. This is the text file that I am using (it's saved on my flash drive).

# import permutations module
from itertools import permutations as prm

num_of_cases = int(raw_input("Input number of words needed to be unscrambled: "))
# take input
counter = 1
while counter <= num_of_cases:
   scrambled_word = list(str(raw_input("Input scrambled word: ")))

# empty lists that will be appended to later
   prm_list = []
   possible_words = []

# takes each permutation of the input and puts in a list
   for i in prm(scrambled_word):
      prm_list.append("".join(i))

   def check(x, y):

   # open list of words
      dictionary = file('E:\MRP\Text_Files\dictionary.txt')

      # check each line in the dictionary against each item
      # in the list of permutations and add it to another empty list if it's a match
      for line in dictionary:
         for i in x:
            if i+'\n' == line:
               y.append(i)


   check(prm_list, possible_words)

# delete duplicates
   possible_words = list(set(possible_words))

# print out possible words
   if len(possible_words) == 0:
      print "No matches found"
   else:
      for i in possible_words:
         print "Possible Word for Scrambled Word #" + str(counter) + ": " + i

# add to the counter
   counter+=1

If you test it out you can see that is very slow, especially as the words get larger. Is there anything I can do to improve the performance of this program?