Orthogonal time frequency space (OTFS) offers significant advantages in managing mobility for both wireless sensing and communication systems, making it a promising candidate for dual-functional radar-communication (DFRC). However, the optimal signal design that fully exploits OTFS's potential in DFRC has not been sufficiently explored. This paper addresses this gap by formulating an optimization problem for signal design in DFRC-OTFS, incorporating both pilot-symbol design for channel estimation and data-power allocation. Specifically, we employ the integrated sidelobe level (ISL) of the ambiguity function as a radar metric, accounting for the randomness of the data symbols alongside the deterministic pilot symbols. For communication, we derive a channel capacity lower bound metric that considers channel estimation errors in OTFS. We maximize the weighted sum of sensing and communication metrics and solve the optimization problem via an alternating optimization framework. Simulations indicate that the proposed signal significantly improves the sensing-communication performance region compared with conventional signal schemes, achieving at least a 9.44 dB gain in ISL suppression for sensing, and a 4.82 dB gain in the signal-to-interference-plus-noise ratio (SINR) for communication.
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