The transformer is working now, with the addition of
only 1 line of code:

Source input = new StreamSource(
  new FileInputStream(  filename ) ) ;

// NEW CODE
input.setSystemId( url_to_dtd-folder ) ;

I didn't have to tweak the XMLReader as suggested.
In fact I had no success trying to do so!

One thing I'd like to know is, how exactly are system
and public ids used? Plenty of sources give conceptual
reasons for them, but what's the algorithm followed by a
transformer, or is there even a standard algorithm?