Linking DTD and XSLT

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XSLT

I have an xslt that transforms any xml but places it all in one line. I am trying to create a DTD at the top of the file however I keep getting a message from the xslt processor in regards to the first line.

"The markup in the document preceding the root element must be well-formed."
Below is my DTD I am trying to use.

<!ENTITY newLine "">

<!ENTITY" <xsl:text xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xml:space="preserve"> &newLine; ">

I have seen sample xlst files using ENTITY declarations not sure why this is a problem.

What I have tried:

Changing the entity declaration.