What would prevent DTMF tones being recognised (modem to modem)?
DTMF tones are only required for dialing out through an exchange. When connecting directly from modem to modem you are already connected, so the phone number is redundant! 

However the Dreamcast modem may expect to get various tones and voltages during the call (eg. dial tone, line voltage) while the receiving modem won't normally answer unless it gets ringing voltage (~90V at 20Hz). You can force the receiving modem to answer with ATA, then it should send carrier (which the Dreamcast modem will be listening for after it has finished dialing) and the two modems should talk to each other. 

To trick the Dreamcast modem into thinking it is connected to a phone line you can connect it to an actual phone line, then quickly unplug it and plug into the other modem after it has dialed. A switch would make this easier, or you could build a 'telephone line simulator' which emulates all the essential functions of an exchange (dial tone, ringing voltage, line voltages with current regulation, linking the audio signal from one line to the other etc.). The one thing you won't need is DTMF tone recognition.

If you have followed the usual procedure for connecting a Dreamcast to a PC modem but it doesn't work then most likely the PC modem is not compatible with your crude line voltage circuit, or it has a software issue. If you have access to two phone lines then first get it to work from one line to the other through the exchange, then try the single phone line trick.