old versions of DOS will not boot from a USB drive without a heavy amount of HDD emulation on the part of the BIOS. the BIOS implementation of USB booting assumes that the OS installed to the USB drive is
USB aware" such as a diagnostic program intended to run of the drive or perhaps a Linux installation.
DOS is not USB aware natively, and requires USB drivers, which can only be loaded after MSDOS.SYS and IO.SYS (or IBMDOS.COM and IBMBIO.COM) load into memory and subsequently read the commands in config.sys.
freeDOS, on the other hand, being newer and more powerful in general, would have far more success in booting from a USB drive, as geek9pm has suggested.
In fact, if your external CD drive won't boot either, then I doubt a thumb-drive will, since under most circumstances a USB-boot aware PC will boot from a external CD drive with a bootable disc just as well as a external thumb-drive or other storage based USB peripheral.