It just so happens I've been working with mysql backups today. I have a database that DH panel reports at 4.065 mb. I used ssh to do a mysql dump and pulled the sql file down thourugh FTP. It weighs in at 3.164mb. Next I used phpmyadmin to make a back up and it weighs in at 3.560.
The phpmyadmin file is a bit bigger becuase there's some extra line seperators and the like.
It's my guess that you're missing a step when making the back up. I'm also going to guess that you'd rather do this thorugh phpmyadmin than ssh/telnet so I'll go over thoes instructions.
First, log into phpmyadmin through the host name you created with the database you'd like to back up. You'll need to log in with the user name/pass that you set up with the database as well.
Now, from the center panel, click Databases.
Click on your database_name.
Select the export tab
click select all underneath the list of tables
Leave all the other settings at default.
Place a check mark for "save as file" towards the bottom.
You should be prompted in a bit to download a database_name.sql file. Save this file and see what size it is. Are you now close to the size DH is currently reporting for your database?