Yes, You are missing something.
Does the 'image.tif' have an extra file such as image.TWF
the .?WF file should have the coordinates & scaling of the image that you
want to import, you can use those to figure out where to place the image in
the drawing manually, BUT, be fore warned, if the image coordinates or notes
say something like "UTM Zone 12 S with NAD83" then you HAVE to import the
dxf coordinate in the same format or they won't match. That I know of,
standard AutoCAD doesn't handle Lat Lon: Lat Lon is a spherical coordinate
system & AutoCAD is cartesian coordinates based.
Autodesk MAP works a lot better to overlay raster images & coordinates,
especially if you have to convert one coordinate system to another or to
digitize the image. You might check their forum.