It really isn't confusing. I think you're still misunderstanding the difference between software being part of the GNU project, and an Operating System being 'a GNU system'.
Firstly, I'll assume by Linux you mean GNU/Linux. Linux itself is not GNU in any way - it's not a GNU system (it's just a kernel) nor is it part of the GNU project. GNU/Linux is a GNU system because it contains GNU software, and is dependent on that software to function. FreeDOS apparently (I'm taking your word for it) contains GNU software, but I'm assuming it isn't actually dependent on it.
And software being part of the GNU project is not just a case of Stallman giving a hoot about it - the authors have to want their software to become part of GNU in the first place. Stallman can't just point arbitrarily at any piece of Free Software he likes and declare it part of GNU.
Presumably the FreeDOS authors have no desire to donate their software to the GNU project. It wouldn't be much use to GNU anyway, since the goal of GNU is to create a unix like system, and the aim of the FreeDOS software is obviously to create a DOS-like system.
[ August 03, 2004: Message edited by: flap ]