I was very frustrated at not being able to export dashed and dotted lines in EPS format, as they come out weird. Finally I found a post somewhere on the internet that suggested editing a certain part of the EPS file to fix it. This is a function which, given the name of the EPS file, will modify the length of the 'dot', making it look better in the image.

I've found it useful to automatically add this function to my standard 'save figure' script, so it is always run.

In EPS file:
/DO { [.5 dpi2point mul 4 dpi2point mul] 0 setdash } bdef

It seems the optimal numbers to go in the EPS file depend on the thickness of the line being drawn. This code changes only the .5 which corresponds to the length of the 'dot'. The number 4 controls the space between the dots. Setting both equal to 1 seems to work well with a Matlab line thickness of 1.5.