can not get in touch with previous owner to remove device how do I erase phone and start over

A password is required to activate this device because its owner has used Find My iPhone to link it to their Apple ID.

If this is your device, enter the Apple ID and password you used to set up iCloud.

If you were given this device or purchased it second-hand, you will need to contact the original owner to have them remove the device from their account.

Find My iPhone Activation Lock - Apple Support

can not get in touch with previous owner

Then see if you can get your money back and return the iPhone.

DFU mode will indeed wipe the device, but as long as that device is still listed under someone else's iCloud account, then it will remain activation locked even after being erased in iTunes with DFU mode. That is the point of activation lock - the device is useless to anyone until or unless the owner of that iCloud account releases that device from their account. It has nothing to do with software or settings on the device itself - it has to do with the established association of that devices hardware IDs to that persons iCloud account. You can erase the device as many times as you wish with DFU mode, but activation lock remains in effect.

Unfortunately, you can't. Activation Lock is an Anti-Theft measure. (I'm not saying you are a thief.) If we knew how to get around it, it wouldn't be much of a deterrent. Try to get your money back. If you cannot get the previous owner to remove the lock, then the device is useless to you or anyone else.

Turn off Find My iPhone Activation Lock - Apple Support

I have heard something about something called DFU mode that allows you to wipe a phone from iTunes from another computer.

See here: http://www.iclarified.com/1034/how-to-put-an-iphone-into-dfu-mode