Since there are many evil characters on the net scanning ports and ip blocks programmatically, can I misdirect an attempt to break into my system by setting the dmz port to a dead ip address or perhaps a honeypot on my lan?
If you don't configure port forwarding then your NAT box will just drop the packets. If you configure port forwarding or a DMZ forwarding to an unused IP address then incoming packets will trigger ARP lookups on your LAN. Lots of wasted CPU cycles and lots of broadcast traffic on your LAN, and in the end the packets still get dropped...
And if you ask this question you are probably not experienced enough to run a honeypot in a safe way, causing a major weakness in your network. You NEVER run a honeypot inside your real network.
In short: don't