The two main differences in what I consider a MUD vs a Dwarf Fortress / Caves of Qud would be that the mud is first person and has a textual description, where DF is third person and uses ASCII to represent things in space. So to describe a Dwarf next to a Goblin in a small room, DF would display:
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#D.#
#G.#
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While a mud would display:
You are in a small room. A dwarf stands next to a goblin.