Just went through the same issue of trying to get the DPAD on my generic usb ps3 controller to work with dreamcast/reicast. It may be different for your setup but if I remember correctly this is what I did to finally get mine working;
Select the Dreamcast emulator from the frontend > start > menu > configure
then go through the whole setting up of your controller again, this will write to configs/dreamcast/mappings/nameofyourcontroller.cfg
This should by right map all your controller inputs to the .cfg file but somehow the DPAD and analog stick isn’t mapped and the entries are blank on mine.
Within the configs/dreamcast/mappings/ folder there is a controller_generic.cfg from which I copied and saved these entries over to my .cgf file.
btn_dpad1_left = 0x220
btn_dpad1_right = 0x221
btn_dpad1_up = 0x222
btn_dpad1_down = 0x223
axis_x = 0x00
axis_y = 1×01
The games I have tested working are:
Marvel vs Capcom 1 and 2
Only problem is the sound is choppy on my RPi2, just got my RPi3 today and will see how they run on that. Good luck with your controller setting. If you get your controller working let us know.