So, I was just about to erase this post, as the title is misleading. I solved the problem, and I decided to leave the question and answer, because it seems like a problem for others, so I hope this helps.
The true problem observed above is a DSN error, not a DNS, but a DSN. Sendmail delivery notification or delivery status notification is a feature that is part of sendmail's MTA.
What happened when I sent mail from my command line, I received a DSN error because the host name was not set in my sendmail.cf file.
I noticed this when I sent mail from another mail client, and it went through OK, and then I looked more at DSmail sendmail itself.
Adding the following line to my mc file and then recompiling to the appropriate cf file fixed the problem:
define(`confDOMAIN_NAME', `your.domainnamehere.com')dnl
source share