Land line circuit suggestion / DTMF project
An ordinary modem will not be sufficient if you want to pass DTMF. If you can't find one that is designed to detect tones, then what you need is the part of a modem called a Data Access Arrangement. It comprises the isolation from the telephone line, audio balancing hardware, hookswitch, and typically a ring indicator for incoming calls.
To build your embedded controller, you would then add a DTMF to binary decoder such as the now-defunct Silicon Systems SSI202. Texas Instruments also used to make a few DTMF decoder chips. You can probably find enough parts online for a one off, otherwise, Microchip has published code to make a PIC decode DTMF.

The actual circuitry of a DAA is not difficult: a 1:1 ratio 50V transformer, optoisolator for ring detector, reed relay for a hookswitch and a capacitor to couple audio will make a usable one. 







simulate this circuit &ndash; Schematic created using CircuitLab

This is a basic DAA that I have built in the past. It shows the "phone" offhook. The LED and transistor comprise an optoisolator that will generate a pulse when an incoming call is received. To take the phone offhook, activate the HOOKSWITCH relay. Now you have an audio connection to the telephone on the other end through capacitor C1.

This is far from an ideal DAA, but it will work well enough to receive DTMF and control external circuitry. I drew it from memory, hope I didn't miss a minor detail :-)

Here is one that uses a triac instead of a mechanical relay. Xecom and Cermetek made many DAA modules. I don't know if they still do.