Reduction from set cover problem to vertex cover problem
Edit: Wherever it says "vertex cover", read "dominating set".

Suppose that the sets are $S_1,\ldots,S_n$ and the elements are $x_1,\ldots,x_m$. For each set $S_i$ there will correspond a vertex $S_i$. For each element $x_j$ there will correspond $n$ vertices $x_j^{(1)},\ldots,x_j^{(n)}$. There is also an additional vertex $t$. Finally, assume wlog that the optimal solution for set cover is not $S_1,\ldots,S_n$ (this can be checked in polynomial time).

The instance of vertex cover is as follows. The vertex $t$ is connected to all of $S_1,\ldots,S_n$. Whenever $x_j \in S_i$, the vertex $S_i$ is connected to all of $x_j^{(1)},\ldots,x_j^{(n)}$. If there's a set cover of size $M$, then there is a vertex cover of size $M+1$ (we need to take the extra vertex $t$ so that all set vertices are covered). I believe that the converse should hold as well.

Try to work it out yourself, and if it doesn't work out, try to fix it and let us all know how.