You COULD do it with a dremel, if you have steady hands. Personally, I would use a small wheel on my belt grinder, but I'm going to assume you don't have a 2x72. An oscillating spindle sander is another option, or if you're good at fixturing/clampling, you might use an end mill to plunge cut into your handle. Make sure the end mill is sharp, and that you're clamped solid and plunge slow, especially if using a drill press vs a mill.
You could then clean it up with a dowel rod wrapped in a fine grit abrasive, or again, with your dremel, if you have steady hands.
Finish up with a little buff, and you might end up with something passable.