DATABASE_HOST = '/tmp/mysql.dev.sock'

This works properly and reliably for Django itself but, on my system at least, it also breaks the manage.py dbshell command: rather than starting and connecting to the correct database, the mysql errors out with the message

ERROR 2005 (HY000): Unknown MySQL server host ‘/tmp/mysql.dev.sock’ (1)

The reason for this should be fairly obvious: /tmp/mysql.dev.sock is not, in fact, a host name. In fact, this whole solution seems pretty wacky to me (why put a value that is distinctly not a host name in the “hostname” value?). The correct way to specify a UNIX socket for the MySQL client libraries to connect to is using the DATABASE_OPTIONS ([most of] the options can be seen in the MySQLdb API documentation):

DATABASE_OPTIONS = {
    'unix_socket' : '/tmp/mysql.dev.sock',
}

Doing so ensures that Django is able to connect (using a UNIX socket on the local host) and that the mysql shell is able to connect (also using a UNIX socket on the local host). Everything works, everyone is happy, and all of our options have values that actually make sense. Hoorah!