Cheated in Undergrad setting While in undergrad in my final semester, I cheated on an exam and got caught. The teacher gave me a zero on the exam, I got a C- in the class, and I got a warning from the Dean's Office, which is on my academic record, but not on my transcripts. 

Fast forward 2 years after graduation, I want to apply to a masters/PhD program. However, I am afraid that nothing I have done since will make up for the fact that I cheated. 

I know I did something terrible, and I was in a very low mental health status back then. I have since attended rehab, and worked a full time job,to give myself time to figure out my life. 

Are my chances for higher education zero? I feel like there is no point in even applying because of my terrible mistake.
There is no harm in applying. There are a couple points to keep in mind:


Unless the place you are applying explicitly asks about it, you don't need to mention it on your own. I do not know if you were on probation, or anything like that - you would have to look at the formal wording of the letter you received from the dean. Students at my school who are punished for cheating are not "on probation" in any formal sense.  You don't want to lie, but you also don't need to bring up anything that you aren't asked about.
If an institution does ask a question which requires you to acknowledge the incident, then answer honestly, and be sure to also address the issue in your statement of purpose. In this case, it might also be good to arrange with a professor to mention the issue and its resolution it in a letter of recommendation. 


The explanation you gave in the question would be fine for a statement of purpose: you went through a difficult period, sought help, and took time to work through the issue. Many people find themselves in that kind of situation, so you are not unique or even unusual.  Some programs may decide not to admit you, but I suspect there are programs that will give you a second chance. It may depend, to some extent, on your field - fields where honesty is particularly important may be less willing.