Non-abrasive iron-based grinding diamond wheels, lacking abrasive particles, negate the concern of detached passivated abrasives scratching the polished surface. During the Electrolytic In-Process Dressing (ELID) polishing process, α-Fe2O3 particles form on the oxide film surface of the iron-based grinding diamond wheel devoid of abrasives. These particles assume the role of the grinding diamond wheel for polishing. Therefore, the ELID electrolytic performance and the oxide film formation performance of the non-abrasive iron-based grinding diamond wheel significantly influence the formation of α-Fe2O3 particles and the subsequent ELID polishing performance. Our studies investigating the ELID dressing behavior of the non-abrasive iron-based grinding diamond wheel have analyzed the influence mechanism of the electric field, flow field, and pulse energy on its ELID dressing. Moreover, the roundness of the ELID dressing grinding diamond wheel, oxide film properties, and α-Fe2O3 particle content were measured, and plate glass was polished using the ELID non-abrasive iron-based grinding diamond wheel. The results illustrate that the non-abrasive iron-based grinding diamond wheel exhibits excellent ELID dressing performance. The diamond wheel’s roundness is less than 0.001 mm, the oxide film uniformly covers the surface, the content of α-Fe2O3 particles is evenly distributed, and the surface accuracy of the polished plate glass is approximately 0.5 nm. These findings provide a compelling case for the continued use and development of grainless iron-based grinding diamond wheels in precision grinding operations.