if you're using a rotary phone, you're not going to get DTMF tones... (unless it's a newer, "retro" electronic one that just LOOKS like a true old rotary...)
rotary phones used pulse dialing, because that's what the mechanism generated (more pulses the more you turned the dial before releasing... corresponding to the numbers on the dial...)
have you checked out the sparkfun rotary cell phone project?
(they are generally regarded as the pioneers of the idea) they have pretty good detail about the construction, should be more than enough to build your own...
**broken link removed**