Hi ionaskye,
I do not have Dystonia but I know a little about Benzodiazepines such as Xanax.
Although Xanax is used to treat anxiety it is prescribed for different conditions. These medications are muscle relaxants which is why I would assume your Doctor prescribed it.
I understand your concern. I use a Benzodiazepine (Klonopin) and one of the things I use it for is Tremors. A side effect of Klonopin? Tremors

However I find it calms Tremors rather than makes them worse.
You may want to give Xanax a try. You might be pleasantly surprised...or not
Best wishes!