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CONFIG.SYS and AUTOEXEC.BAT are files essential to DOS. They also exist in Windows NT but they are called CONFIG.NT and AUTOEXEC.NT and reside in C:\WINNT\SYSTEM32.

They are executed every time a DOS subsystem is created within NTVDM.EXE, which means every time you start a 16-bit program (Like Command.com). They will configure the environment in which the program will be executed in. This includes WinNT DOS drivers like ANSI.SYS.

Note if the AUTOEXEC.NT has been damaged/lost (usually deleted by a virus, so remember to update virus scanner), then one can usually restore the AUTOEXEC.NT by copying it from \Windows\Repair to \Windows\System32. When running a DOS program without the AUTOEXEC.NT being in place it will give the following error message:

16 bit Windows Subsystem - C:\Windows\System32\AUTOEXEC.NT. The system file is not suitable for running MS-DOS and Microsoft Windows applications. Choose 'Close' to terminate the application.

More Info MS KB Q324767

Note it possible for Windows NT4/2000 to parse the AUTOEXEC.BAT (Placed in the root of the system-drive) during user logon, and append the PATH environment variable to the user PATH. The parsing of the AUTOEXEC.BAT is controlled by this STRING registry value:

[HKEY_CURRENT_USER \Software \Microsoft \Windows NT \CurrentVersion \Winlogon]
ParseAutoexec = "0" (Default = "1", Ignore = "0")

More Info MS KB Q124551

More Info MS KB Q101875
More Info MS KB Q103656
More Info MS KB Q129128
More Info MS KB Q165214
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More Info MS KB Q314495