Under cross-examination on Thursday, the woman, known only as JC, rejected suggestions that she was on a "mission to destroy" Dawson, 73.
Dawson's barrister Pauline David suggested statements that her client had drugged his wife Lynette Dawson with alcohol so he could have sex with JC in 1981, and that he had been physically abusive to JC after their marriage in 1984 were false.
Dawson is accused of killing Ms Dawson and disposing of her body in January 1982 so he could have an exclusive relationship with JC, now 58. He has pleaded not guilty to murder.
A statement made by JC in 1990 to the police, claiming Dawson had tried to hire a hitman to kill his wife in late 1981 but then changed his mind, was motivated by legal proceedings between the couple and "considerable acrimony" in their relationship at the time, the NSW Supreme Court heard.
These allegations were emphatically denied.
"I'm not going to destroy him. He will destroy himself for what he's done to people and to me and to Lyn. I'm telling the truth," JC told court.
Earlier in the day, JC said Dawson's behaviour as her high school teacher in 1980 was inappropriate, claiming he singled her out with attention and brushed up against her in the classroom.
"He groomed me and abused me and insisted that I marry him," she said.
Ms David suggested JC had been the one who first approached Dawson in high school to discuss her troubled home life.
"You ... went out of your way to find time with Mr Dawson," the barrister said.
"No," JC replied.
JC said she moved into Dawson's home in Bayview, Sydney, in the days after his wife Lynette's disappearance.
She told the court that in August 1982 she was unhappy about the situation at home and having to take care of the Dawsons' two young daughters.
"I was 18. I was taking care of two children, having to learn to cook, having to learn to clean, having to learn to be the substitute housekeeper, sex slave, stepmother, babysitter, slave," JC said.
A plan over Christmas 1981 for the pair to start a new life in Queensland was aborted when JC felt sick on the drive there and wanted to return to Sydney as she missed her family.
Wanting out of the relationship at the time, JC told the court she took a trip up to South West Rocks with her family in early January 1982. On a phone call during this trip, Dawson told JC his wife had left him, the court heard.
Returning to the Dawsons' Bayview home, JC said no one else was there. She moved in and a few weeks later was allowed to pick some of Ms Dawson's clothing to keep as her own.
When asked where his wife was, JC said Dawson gave various explanations including that she had gone away with "religious people" and that she had been seen variously in Perth or the NSW Central Coast.
JC said she was sceptical of the explanations, describing them as a way to "fob her off" and shut her up, saying Dawson never provided any concrete evidence behind his claims.
On their wedding day in January 1984, JC claims Dawson grabbed her by the throat without warning.
In December that year, the court heard the couple moved into a Gold Coast bushland property surrounded by a six-foot tall chain-wire fence. JC called it "The Compound", saying she felt like a prisoner there.
She described how Dawson forbade her to have social contact, cut up her credit card, and got physically violent in an argument over when she was allowed to wear a g-string.
The topic of Ms Dawson's disappearance was brought up only once as the relationship deteriorated, the court was told.
"I said, 'You got rid of your first wife, you could easily get rid of me'," JC said.
The judge-alone trial continues Friday.
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