Clashes were ongoing on the northern outskirts and Iraqi forces were dealing with the final pockets of resistance inside the city, he added.
Dillon, on his part, noted that all coalition's bases were temporary until the end of fight against terrorists in Iraq.
Iraq's foreign minister says Iraqi military forces have taken 70 percent of the Islamic State holdout town of Tal Afar.
Tal Afar sits on a strategic route between IS-controlled territories in Syria and Mosul, 70 kilometres further east. Officials have said the capture of the city would make it even more hard for the jihadists to transport fighters and weapons between Iraq and Syria.
Ibrahim al-Jaafari made the announcement at a news conference with his French counterpart on Saturday.
Almost 2,000 militants were believed to be preparing to defend the area from over 40,000 Iraqi forces.
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Tal Afar has produced some of IS's most senior commanders and was cut off from the rest of IS-held territory in June.
Iraqi security forces had retaken 27 out of 29 neighborhoods in Tal Afar by Saturday evening but in two neighborhoods on the northeast side, fighting was continuing, a statement from the Iraqi joint operations command said.
In the early hours of Sunday morning, Iraqi Prime Minister Haider al-Abadi announced the commencement of operations by security forces to retake Tal Afar, which has a large Turkmen population as well as Arabs and Kurds.
She said that more than 30,000 people had already fled the city and its surrounding areas, but some 10,000 civilians still remain inside.
Iraqi officials often declare areas liberated before the fighting has completely ended, and the militants have been known to carry out surprise counterattacks. Those remaining are threatened with death by ISIL, according to aid organisations and residents who managed to flee.