9.95 per year is the domain registration fee. This buys you the name for one year, but gives you no server to use. The 119.40 buys that for a year at dreamhost.
Dreamhost doesn't have an email only plan, but other places do. If you want email only, you might want to check out outlook.com which is a newer Microsoft offering that I personally now reccomend as one of the best low cost solutions that also uses "push" technology for smartphones.
Be careful to read reviews for whatever email service your thinking about. Some are less friendly and make you use webmail only, others may generate a lot of spam and adding your domain to their server will end in your email being bounced or moved to spam folders, just based I the reputation of the server. (Dreamhost customers run into this actually).
Once you've picked out who you want to go with you will either need to set the nameservers or mx record for that domain you purchased (the 9.95 above).
You probably want to cancel the hosting portion from dreamhost if all you want is email only.