It's asking you for your unix username rather than your account/panel/webid username, the first one of which is an automatically generated name made from the first three characters of your first and last name and a sequence number to guarantee uniqueness.
But before you try to parse that sentence, let me just restate that the "first server username" as mentioned in the sign up screen is linux/ftp/cgi-runs-as username for the unix user under which all your files are uploaded and under which your scripts run. Note that advanced users may create more than one unix account name in order to have different people manage different sites and to keep things nice and separate from the security standpoint.
As you've observed, this has nothing to do with your first server. It also has nothing to do with the name you use when you log in to the Dreamhost web panel to manage your account, your payments, or anything "account related" rather than "website related".
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