There is no easy way to do this with the DOS setup by WinSetupFromUSB as this utility was designed to create bootable USB install systems for older versions of Windows that originally couldn't install from USB.
Even though it can make a DOS USB stick too, it was never intended to be used as a full-fledged DOS.
I can give you an alternative:
Rufus can create MSDOS and FreeDOS USB sticks.
Especially FreeDOS is really nice as it plays along much better with todays computer hardware than the original DOS and for nearly all intends and purposes it is 100% compatible with MSDOS.
Rufus has several FAQ's that explain how to set it up with FreeDOS to make a DOS-based USB-stick to do Bios updates for computers that insist of doing such updates from DOS.
These instructions can also be used to setup other DOS programs: Simple replace the Bios flash-utility with your DOS program of choice.
EDIT: After seeing some of the comments
- Rufus can be used to setup a USB stick with any DOS version supplied by you. Getting a legal copy of MS-DOS is another matter. It is not for sale anymore. And telling you how to get one violates the charter of this web-site.
- Please bear in mind that getting any version of DOS to boot from a USB stick requires fooling DOS that it is booting from floppy, hard-drive or CDROM
This means that any USB booted DOS is not running exactly as a normal DOS. There will be a minimal emulation driver loaded to make this possible.
If 100% compatibility with a normal DOS is an absolute requirement (as you seem to imply in the comments) then forget about using USB in the first place. Install a hard-drive, use boot-floppies or a boot-CD.