Unless you are a master of the rush assault (which I am not) and have the missions (in which the DL are present) locked up in 10 turns or so, you're going to struggle - and most likely fail - to overcome them. The sad part about it is, you will spend many, many, many, many turns fighting off invasions and carefully balancing your budget only to look up and find that the DL's now have literally dozens of FLEETS patrolling the galaxy, stopping by any planets that have produced a ship to destroy it.
And that sinking feeling you get upon discovering that: 1) you're going to lose or 2) you're going to spend many hours holding them off until you can catch up, if it is truly possible to do so - that is supposed to your reward?
For a game that prides itself on its open-endedness, it seems wrong that there exists only one way to defeat the DL's. They are unassailable culturally, already have all the best technology and cannot be bargained with (although the Drengin didn't have any problems making Peace with them).
The Dread Lords are way too overpowered to be balanced and competitive. I got almost all the ship building tech researched in the final mission and was nowhere close to having the same tiny/small Scout-class ships with 100+ Attack, 11 moves per turn, and even (later on) 50-90 defense to the high level weapons you've been working your butt off to research.
And this all occured on the Simple to Normal game settings.
I am fairly new to this genre, Civ III being my first experience with it. My pity and my sympathy go to any who are experiencing 4x strategy gaming for the first time at the hands of the Dread Lords.
I have two suggestions to submit:
1) Allow the "good guys" some access to the Dread Lord's old foes - either in person as allies, or discovering tech. The best I got was a stupid side mission (when I failed the mission after Seige) that helped me discover . . . wait for it . . . Missile Weapon Theory! This was going to be the key to defeating the Dread Lords!? C'mon, guys. That was a joke, right?
2) Once the Dread Lords have appeared, all tech that has been researched should CARRY OVER to the next mission (provided you win). Otherwise, there is no way you can research all the way up the tech tree and be competitive against them (at least before the afore mentioned DL fleet infestation occurs).
I may be inexperienced, but I am not so unintelligent (power-gaming genre specialists: please keep the heckling to yourselves) as to realize that I am being herded into a certain style of "play." I would much rather have a close, hard-fought victory than an all-out rout of or loss to my foe(s). Unfortunately, those seem to be the only choices available against the Dread Lords.
I just wish I hadn't wasted so much time trying to have fun before I learned that sad lesson.