They were doing every pixel manually, if the above quote is to be believed (which isn't that uncommon in that era, I heard similar stories from other dev teams and how they did their art)
If you use DP a bit there are a lot of telltale signs of its filters/techniques in various games of the era, like the stones in the Wiz7 screenshot clearly being the result of the dithered gradient together with an antialised line for the corners. The way they work isn't like photoshop filters, you still need to do manual work with the mouse as they work in conjunction with the regular painting tools - the filter is basically applied to the brush and tool you work with.
They most likely also did manual pixel dithering as that allows more precision but it'd be limited to specific parts as it isn't very practical to do everything like that (and besides one doesn't buy DP to plot all pixels by hand, even the free paint program that often came with mice would do for that :-P).
For example in this Wiz6 image (i randomly found online):
The ground looks dithered using DP (which was most likely also used to make the perspective tiles as it had a dedicated tool for that) but the troll looks as if it was dithered by hand. TBH i'd expect the monster art to be done with more manual dithering than the environment.
As a quick test i spent a few minutes trying to make the dithering in the stone pillars at the top left and right corner in the Wiz7 UI in DP:
Obviously with not having used DP in many years (or barely at all, i have almost zero experience with it) and only using the default palette and spending only just a few minutes on it, i couldn't get them looking like the Wiz7, but i'm certain that they used that DP functionality to make these (also most likely they used the spray with translucency enabled to add a bit of shadow and variation). Sadly masking is kind of a PITA (and no such thing as layers either) so i guess the process still took them a lot of time.
Also the perspective tiling tool in DP is almost designed (or maybe even explicitly designed, considering it was made by EA for game art) for first person mazes :-P
...though obviously with some fixes after the fact for the magnified bits and adding some fade out (most likely with the spray tool and a black pixel brush) in the distance.
Sometimes i'm thinking about making a DP-like tool for fun at some point as it is neat for working with palettized images like sprites or retro styled textures (AFAIK DP was used for 2D art even in the midlate 90s, e.g. Quake 2's textures and most UI elements were made using it) :-P.