A RedLine (.rdl) is essentially an empty MicroStation file that references the DGN file. It's used to 'markup' a layer that appears on top of the contents of the DGN file without actually touching / changing the DGN file.
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Yes, FME can read and write RedLine files using the Microstaion v8 reader/writer.
Attached is a simple workspace to create a new RedLine file for any DGN file. When you open it in Microstation, the target DGN file will already be attached as a reference.