The time-domain equalizer (TEQ) is a commonly used device to shorten the channel impulse response a discrete multitone (DMT) receiver. With a capacity maximization criterion, many methods have been proposed to solve the TEQ problem. However, due to a mis-calculation of noise power, the optimal solutions claimed are actually not optimal. Since the noise component in a DMT symbol does not have cyclic prefix, the discrete-Fourier transform (DFT) of the TEQ-filtered noise does not equal to the DFT of the TEQ multiplied by that of noise. In this paper, we analyze the TEQ-filtered noise in detail and derive the correct noise power calculation formulae. Based on the result, we propose a new TEQ design method outperforming existing ones.