For that mission, I just ignored the Dread Lords and focussed on colonising planets in a bee-line for the Drengin planet. Then I focussed my research into warfare resources (fulling teching up the planetary invasion tree) and built up several fleets of heavy fighters (Medium hulls, best weaponry you can afford) to clear out the fleets of Drengin/Yor. I then just streaked a transport up to the Drengin planet and took it. In short, your goal is to get the Drengin homeworld, as fast as possible. Don't bother about setting up a stable economy etc. as the Dread Lords will just come and rape all your traders/starbases etc. IIIRC you start with 25k+ in the bank, so you can get a foothold pretty quickly by quickbying ships/buildings.

The trick to fighting the dread lords is to try and do it as quickly as possible =P I don't think there's much chance for setting up a nice stable empire and then launching a leisurely attack. It's calm for the first few months and then they begin to get their invincible frigates snooping around and blasting anything you have floating around. Their main weakness is that they usually don't use big fleets, they focus on one weapon type usually and they use hit and run tactics. So the best offence is to try to gangrape their inidividual ships with a horde of your own. But even that 'horde' will have to be of a pretty high level to take down their frigates et al.

Honestly, the best thing you could do is read through the AAR about the Dreadlords in the databanks. That's how I managed to be able to get a foothold in the dread lord scenarios