Last season's Pokal runners-up Dortmund continued their attempt to go one better by comfortably winning 3-0 at St Pauli on Tuesday.
Dresden were relegated to the third level of German football last season, but they have already upset Bundesliga side Schalke and second-tier Bochum to get this far.
And Dortmund coach Klopp is aware there is no room for complacency.
"I hope it stays quiet and there is a festival of football in a positive way," he said.
"[But] they have already beaten Bochum and Schalke. Dresden is a real cup team, one can definitely say that. We have been warned."
Dortmund lost to rivals Bayern Munich in last season's final and Pep Guardiola's men continue their defence against Eintracht Braunschweig, who were relegated from the top flight last term.
This season's Pokal has already seen nine Bundesliga teams eliminated, the most top-flight casualties at this stage since 1993.
The likes of Bayer Leverkusen, Wolfsburg and Werder Bremen will contest the third round against Kaiserslautern, RB Leipzig and Arminia Bielefeld respectively.
Borussia Monchengladbach sit second in the Bundesliga and they must overcome Kickers Offenbach to reach the quarter-finals.
Draw in full:
Bayer Leverkusen v Kaiserslautern
Kickers Offenbach v Borussia Monchengladbach
Bayern Munich v Eintracht Braunschweig
Aalen v Hoffenheim
RB Leipzig v Wolfsburg
Arminia Bielefeld v Werder Bremen
Freiburg v Cologne
Dynamo Dresden v Borussia Dortmund
‘Scoring in a World Cup is like winning the title – can you imagine millions of people celebrating something you did? It’s insane and made me very proud’: Brazil legend explains how much 2002 goal meant to him
'He already had the ability but didn’t use it because he was afraid to shoot – I said, "You’re a player who has to decide games – you have to take risks, mate"': Liverpool star was forced to become confident by team-mates
