We present the first IceCube search for a signal of dark matter annihilations in the Milky Way using all-flavour neutrino-induced particle cascades. The analysis focuses on the DeepCore sub-detector of IceCube, and uses the surrounding IceCube strings as a veto region in order to select starting events in the DeepCore volume. We use 329 live-days of data from IceCube operating in its 86-string configuration during 2011-2012. No neutrino excess is found, the final result being compatible with the background-only hypothesis. From this null result, we derive upper limits on the velocity-averaged self-annihilation cross-section, , for dark matter candidate masses ranging from 30 GeV up to 10 TeV, assuming both a cuspy and a flat-cored dark matter halo profile. For dark matter masses between 200 GeV and 10 TeV, the results improve on all previous IceCube results on , reaching a level of 10 cm s, depending on the annihilation channel assumed, for a cusped NFW profile. The analysis demonstrates that all-flavour searches are competitive with muon channel searches despite the intrinsically worse angular resolution of cascades compared to muon tracks in IceCube.