HI Werner
Yes you should be able to just do the upgrade from the Domain Manager with the remote SQL instance. We usually advise people to upgrade the mdb first on the remote server by run setup.exe and choose install mdb as it avoids connection issues. if you do make sure you use the correct SQL port and if applicable the instance name.
Then run setup.exe on the Domain Manager itself and it should locate the mdb.
Please make sure the Windows account you use to do the upgrade is a member of the Local Administrators on the DM and the SQL Server and has the SQL server role of SYSADMIN assigned to it. You should also stop caf prior to the upgrade and make sure there are no active connections to mdb.
Thanks and let us know if you have any followup questions