I want to remove the .lan dns suffix as this is causing issues on my network. However as this is not possible to change via the web interface, I tried to connect via telnet and do it there. I found several guides for this on the internet, but it seems that my draytek does not like any commands.

The command I was planning to use it 'sys domainname clear'

My problem however is that it looks like my draytek won't have any commands and if i use commands like 'option' or 'config' it doesnt give an error no matter what i type behind it, so thats not correct either.

I also sent this to the draytek support address and received a reply with an answer. I thought I'd share it with others in case they need similar information.

The Vigor 2750 series is based on OpenWRT, it has a linux CLI interface available in the telnet interface, the other routers have a DrayOS specific interface.
This page shows how to reconfigure the DNS suffix:
http://wiki.openwrt.org/doc/uci/dhcp

This needs to be edited using the cli by entering:
cd /etc/config/
vi dhcp

Vi is a text editor usable via the telnet interface, here is a basic command guide:
http://www.cs.colostate.edu/helpdocs/vi.html

The options to edit specifically are "local" and "domain".