My plan was to connect it to another dialup modem with nothing more than a phone cable between the 2. This did not work at all. The modems are expecting some kind of phone line with some current flowing through it. What I did would be similar to connecting 2 handsets together with some phone wire. You can talk as loud as you want, but nothing is going to come out of the other phone's speaker.
What I need is some kind of line simulator that will fool the modem(s) into thinking that it's actually connected to a phone line. I found this after some searching http://www.jagshouse.com/modem.html. After obtaining the parts and assembling it together:
It did not quite work out. Same as before, nothing. NO CARRIER. Turns out I needed to do a bit of tweaking with the resistor. The value stated in the article may have worked for some modems, but for my specific one, I had to wire 2 of the 390 ohm resistors in parallel just to get a 8mA current... the articles I read say that the phone company provides 30mA ... and 25mA would have been enough. but after that, it worked. I will do a little more adjusting of the resistor if needed later on.
I used a digital multimeter to check the current flowing through the circiuit so you see the leads I used still in the picture.
I had to run minicom (a comm program) to type "ATA" to tell the modem to answer. After that I quickly exit without hanging up and at the command line type:
pppd /dev/ttyS0 115200 crtscts 10.0.1.201:10.0.1.225 proxyarp passive
After that.. a peek at /var/log/messages reveals connection successful. And I can ping the dreamcast's IP. Another machine on the lan can ping it as well (that's what proxyarp means). I will be automating this later on... but for now I'll leave it a manual process just to get it running.