Hi - you definitely can use dumbbells in place of a barbell, I did it for quite a while. I had used my husbands barbell for about 2 years. Then I got pregnant and when my belly got too big, I had to switch to dumbells when I was doing the rows. When I started lifting again, I stopped using the barbell altogether because it was just a hassle taking my husbands weights off.
I just bought my own Troy barbell set a couple weeks ago and I really like it better than just using the dumbells. Especially for squats. I had been holding the dumbells on my shoulders, but the heavier ones kind of dug in. You're going to advance very quickly in the weights you use for squats and you'll find that you're dumbells may be too heavy to hold in your hands (or on your shoulders as I had been doing) and you'll want the barbell.
The Troy set was about $90 with shipping, but you can get much less expensive ones at Walmart. I just liked the rubber encasing and the quick-change ability of the Troy set.