Yes, PowerISO supports Mac Images in DMG format. In fact this information is provided on the page of PowerISO.
By default, PowerISO supports the following file formats: BIN / CUE, DAA, UIF, DMG, MDF / MDS, ASHDISC, BWI / B5I, LCD, IMG, CDI, CIF, P01, PDI, NRG, NCD, PXI, GI, FCD, VCD, C2D, BIF.
Open the software, go to Open and locate the DMG file. To narrow down results, choose Mac Images next to the File name field in the Open dialog.
