Help with rays?

The problem is that your ray is only 1 stud long, so it doesn't hit anything. Also, why are you casting a ray, when you can already use mouse.Hit, to place the part? Anyway, here is fixed code:

Tool = script.Parent
Handle = Tool.Handle
Player = game.Players.LocalPlayer
Camera = game.Workspace.CurrentCamera
---------------------------------
function CreateDisplayPart()--Creates DisplayPart
    local DisPart = Instance.new("Part",Camera)--Hides it from players
        DisPart.Anchored = true
        DisPart.CanCollide = false
        DisPart.Transparency = 0.5
        DisPart.Name = "DisplayPart"
	DisplayPart = DisPart
    end
---------------------------------
    Tool.Equipped:connect(function(Mouse)
        ---------------------------------
DisplayPart = Camera:FindFirstChild("DisplayPart")
        if not DisplayPart then--If not found then makes it
            CreateDisplayPart()
        end
         Mouse.Move:connect(function()

                local Ray = Ray.new(Mouse.UnitRay.Origin,--Creates ray
                                 Mouse.UnitRay.Direction * 900) -- Ray will go 900 studs as max

                Hit, pos = Workspace:FindPartOnRay(Ray, DisplayPart) -- Also gotta add the part to ignore filter
            if Hit ~= nil then --If not nil then do the following
		-- Use CFrame here, or else the DisplayPart will get placed on top of the intersecting part.
                DisplayPart.CFrame = CFrame.new(pos) -- Direction doesn't tell where the ray hit the ground
                end
            end)
    end)

Edit: Fixed up the script. And you ignore the part itself, so you ray wouldn't stop at the part, but at things behind it. Also, here is the alternative way of doing same thing:

Tool = script.Parent
Handle = Tool.Handle
Player = game.Players.LocalPlayer
Camera = game.Workspace.CurrentCamera
---------------------------------
function CreateDisplayPart()--Creates DisplayPart
    local DisPart = Instance.new("Part",Camera)--Hides it from players
        DisPart.Anchored = true
        DisPart.CanCollide = false
        DisPart.Transparency = 0.5
        DisPart.Name = "DisplayPart"
	DisplayPart = DisPart
    end
---------------------------------
    Tool.Equipped:connect(function(Mouse)
        ---------------------------------
DisplayPart = Camera:FindFirstChild("DisplayPart")
        if not DisplayPart then--If not found then makes it
            CreateDisplayPart()
        end
         Mouse.Move:connect(function()
		mouse.TargetFilter = DisplayPart
            if mouse.Target then --If not nil then do the following
                DisplayPart.CFrame = CFrame.new(mouse.Hit.p)
                end
            end)
    end)