He had similar powers to his archenemy Nightmare. Dusk manipulated the minds of the insane, by entering their minds and transforming their thoughts into tangible constructs. These constructs appeared to be more than just dreams or illusions, and they drove his targets out of their minds. When they hear voices, its his voice they are listening to.
Dusk was the Ruler of the "Realm of Madness", a dimension which grants him access to minds of the insane. His early exploits are still a mystery, however, it is documented that one his first acts was upon the Ghost Rider (Daniel Ketch). Dusk assisted the sick and twisted Typhoid Mary who was attempting to keep Ketch trapped in the Ghost Rider's form. Dusk told Typhoid Mary that he could cure her in his realm. She only had to drive Ghost Rider mad so that he would enter the Realm of Madness.