Using setText on a textField with a setEchoCharacter in a Dialog Window displays
the unmasked characters.

Test example:
import java.awt.*;

public class DialogWindow extends Frame {
    private boolean inAnApplet = true;
    private SimpleDialog dialog;

    public DialogWindow() {
        Button button = new Button("Click to bring up dialog");
        Panel panel = new Panel();
        panel.add(button);
        add("South", panel);
    }

    public boolean handleEvent(Event event) {
        if (event.id == Event.WINDOW_DESTROY) {
            if (inAnApplet) {
                dispose();
            } else {
                System.exit(0);
            }
        }
        return super.handleEvent(event);
    }

    public boolean action(Event event, Object arg) {
        if (dialog == null) {
            dialog = new SimpleDialog(this, "A Simple Dialog");
        }
        dialog.show();
        return true;
    }

    public static void main(String args[]) {
        DialogWindow window = new DialogWindow();
        window.inAnApplet = false;

        window.setTitle("DialogWindow Application");
        window.pack();
        window.show();
    }
}

class SimpleDialog extends Dialog {
    TextField field;

    SimpleDialog(Frame dw, String title) {
        super(dw, title, false);

        this.addNotify();

        field = new TextField();
        field.setEchoCharacter ('*');
        this.add("Center", field);

        field.setText ("The magic word is ");

        //Initialize this dialog to its preferred size.
        pack();
    }

}