Cris -

You haven't said what platform you're working on, and we use the version 2
client, but whenever we've seen this error it was because we were trying to
use something other than the default options file (dsm.opt) and had not
entered the environment variables in the autoexec.bat.  What we add is:

P:\WIN32APP\IBM\ADSM\BACLIENT) to the PATH= and the following two lines
DSM_DIR P:\WIN32APP\IBM\ADSM\BACLIENT
DSM_CONFIG P:\WIN32APP\IBM\ADSM\BACLIENT\optionsfilename.opt

I don't know how this is going to help you, though, because we aren't using
different options files for the same client but option files named
specifically for each client (Cris.opt, etc.) that are stored on a common
file server.

Probably isn't much help to you except to point you at something to check
into.