How to enable maximum Dead Code Removal?
Enable your IDE's verbose of the compile via the preferences. From there you can see exactly what and how it is being compiled.

In short the IDE (and toolchain) will compile everything and anything it can find into an object. Where only the used code is compiled in the linking phase, as garbage collection is enabled with the "--gc-sections" command.

Note that the optimization level is "-Os" or "Optimize for size". In IDE 1.0.+ this appears to be hardcoded. Where as in IDE 1.5.+ the compiler options are configurable, in "\arduino-1.5.6-r2\hardware\arduino\avr\platform.txt" can be customized to meet your needs.

Where you can use the avr-objdump command as described in https://stackoverflow.com/questions/15291750/does-importing-libraries-load-everything-in-arduino/15296808#15296808. 

I would recommend 1.5.6r2 and not 1.5.7 as the gcc commands won't run individually without some path manipulation.