Dovecot is used for mail delivery and should not be confused with the server root. You set up users with passwords usually in the /etc/passwd /etc/shadow directories.
For instance in the dovecot.conf file:
protocols = imap imaps
auth default {
mechanisms = plain login
passdb pam {
args = dovecot
}
userdb passwd {
}
socket listen {
client {
path = /var/spool/postfix/private/auth
user = postfix
group = postfix
mode = 0660
}
}
}
Dovecot will use PAM for password authentication and look in the /etc/passwd file for users and match them with password from either /etc/passwd or if not found there /etc/shadow
So whatever user/password combinations you create, those are the ones that can connect via IMAP from your squirrelmail interface