Recently I discovered that trying to make a new .dm file named '' resulted in said .dm file to be un-included the instance it was made, and for DreamMaker to spurt out a 'Unable to read' error. This got me thinking that is probably an internal system file.

Just out of curiosity, I'd like to see the contents of this elusive dm file, if that's ok. :)
This actually isn't caused by BYOND, it's caused by Windows. is a reserved device name. Attempting to save any file as will fail. You'll get an actual error message when you try it from programs like Notepad.
In response to Nadrew
Oh, wow. :o That's interesting. Thanks.
In response to Metamorphman
Other ones to avoid are CON, PRN, COM1, COM2, COM3, COM4, LPT1, LPT2, LPT3, and NUL.

Attempting to create a file (with any extension) named as one of these will usually fail under windows. This stuff is a hangover from DOS where you would read and write to these pseudo-files to access devices like printers and serial ports. AUX for instance was an alias for COM1, the first serial port.