When saving a DGN file to DWG format, you can use the Entity Mapping options to control how polylines are saved.

• Planar line strings by default are saved to 2D lightweight polylines with an appropriate extrusion vector and elevation. For applications that do not effectively support lightweight polylines, you can map planar line strings to 3D polylines.
• Nonplanar line strings by default are saved to 3D polylines. For applications that do not effectively support 3D polylines, or the line strings whose vertices are nonplanar by a small deviation to the nearest plane, such line strings are represented as light weighted polylines. If there is a large coordinate deviation, it indicates that the nonplanarity is by design and hence the mapping is ignored.