You are of-course correct. It does not seem possible to redirect a domain to a URL via the panel unless the domain is hosted here at DreamHost.
If you just wished to host the domain elsewhere, you can of-course modify the domains DNS records to point to the other hosts DNS servers (using Domains -> Registrations), but I doubt this will help in your particular case, unless you can convince your ISP to handle requests for your domain and redirect them to your user space.
I suggest you contact DreamHost support (and/or your ISP) and explain the situation, they may be able to provide a work around.
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