Aims. DH Cephei is a well-known massive O+O-type binary system on the northern sky, situated at the center of young open cluster NGC 7380. Our high-precision multi-band polarimetry clearly reveals that variations of linear polarization in this system are synchronous with the phase of the orbital period. We used the observed variations of Stokes parameters q and u to derive the orbital inclination i, orientation Ω, and the direction of rotation. Moreover, in order to obtain a rough estimation of the interstellar polarization in the vicinity of DH Cep, we observed polarization arising from the neighboring stars in the cluster. Methods. We used the Dipo1–2 polarimeter in combination with the remotely controlled 60 cm Tohoku T60 telescope to obtain linear polarization measurements of DH Cep in the B, V, and R passbands at the accuracy level of ~0.003%. To obtain an estimation of interstellar polarization of DH Cep, we observed more than a dozen field stars identified as members of NGC 7380 and in the close proximity to DH Cep. A Lomb-Scargle period search was applied to the acquired polarization data to reveal the dominating frequency in polarization variations. We used a standard analytical method based on a two-harmonics Fourier fit to derive the inclination, orientation, and the direction of rotation of the binary orbit. Results. The variations of Stokes parameters in all three B, V, and R passbands clearly suggest an unambiguous periodic signal at 1.055 d with an amplitude of variations of ~0.2%, which corresponds to half of the known orbital period of 2.11 d. This type of polarization variability is expected for a binary system with light-scattering material distributed symmetrically with respect to the orbital plane. In addition to the regular polarization variability, there is a nonperiodic component, which is strongest in the B passband. In the V passband, we obtained our most reliable values for the orbital inclination i = 46° + 11°/ − 46° and an orientation of the orbit on the sky of Ω = 105° ± 55°, with 1σ confidence intervals. Using our best estimate of i and the polametric amplitude in the V passband, we estimated that the mass loss from the system is ~3.4 × 10−7 M⊙ yr−1. The direction of the binary system rotation on the plane of the sky is clockwise. Our polarimetric observations of neighboring stars of DH Cep in NGC 7380 reveal that the polarization of the cluster stars is most likley due to aligned interstellar dust in the foreground.