localhost would be your phone. I'm guessing you are trying to connect to dfterm2 running elsewhere like your home computer? So you need to "telnet dfterm.com 8000" instead. dfterm.com being your server or ip.
If you are on wifi on the same network as the server, you can use the lan ip. To get that in windows, goto start, type cmd. type ipconfig. You are looking for your ipv4 address. Telnet to that address to connect. Also, unless you changed the port manually, it should be port 8000 by default.
If you are connecting from outside your lan, you need to get your external ip and foward the port to your server. To get your external ip, you can use
moanmyip.com(or whatever tool you find more appropriate, lol). To forward the port 8000 from your router to your computer you need to log into the router. To get your router address use the same procedure as above to get your ipv4 address but instead get the default gateway. Type that into your browser. The default username & password should be written on a sticker on your router. Look for a port forward option. Set it to foward tcp 8000 from the router to the ipv4 address of your dfterm2 server. Now you have a public server! Telnet to your external ip like "telnet xxx.xxx.xxx.xxx 8000" from your android. You won't be able to connect to that external ip if you are inside the network.
If you are still having problems or my initial assumption of what you were trying to do was wrong, send a pm and i'll try to help as best as possible.