No, DTOs have nothing to do with annotated classes. They can be simple java beans which contain the data you’re retrieving from the database.
The hbm.xml format has been deprecated for a long time, and will be removed in the coming versions of Hibernate. I strongly suggest considering a migration to either annotated classes or at least the new orm.xml format (see this discussion for tips with using the hbm.xml trasnformer tool to help with migration).