As you can see from other posts, dimensioning involves a number of things
I will stick with what I do in Model Space. That is where your imported dwg file should be located.
After you have made 'changes' in model space, you create a Viewport and open that viewport in Paper Space (which will have different scaling options, mainly because you are laying out Paper Spaces that are scaled to fit the paper size). I do all my line work / dims etc in model space, paper space is only for printing.
But for Model space, I just import the dwg.
To get items you Draw in model space to show up in feet and inches...
Go To >Options (on top)> Space Units > change Units in Workspace to > Architectural
To get dimensions in feet and inches and sized properly...
1 Select an existing dimension in the dwg > right click > Properties > check the Font Height (and Style)
In the attached you can see the Font Height is 10". So I then select the Dimension Tool and adjust.
2 Select Dimension tool > right click > Properties >Format > change Dimension Size Scale
( I made mine 40 , the plan was at 1/4" scale and text test was 10 inches , so 4 x 10 = 40. I didn't change the font itself.)
That's it. I didn't adjust the model space to any 1/4" scale. I didn't change anything in the Dimension tool except it's 'size', no value changes.
You can see from the 'sample new dim' jpg, that all matches well (except of course the font in New Times not Cadsoft).
If for some reason your dimension scaling itself is still off you may find the Dim Properties > Units/ Tolerance works but you should not have to do that. Or at least I never have had to.