The third parameter of d3py.logon is the user password.  Do you not have a password for 'dm' on your local system?  I can only presume this is the error it is advising you on

@Mike Young; thanks for this but no. I had tried with a/c and User having a password, but each combination returns the same result.

I really don't understand - it should be so simple :(

As you say it should be simple.

The error 80011 is basically a bad username or password so I would concentrate on there.  This is a response from d3 so you are attempting to logon just not providing the right credentials.

Sorry, I  use Unidata so don't know enough about d3 (only dabbled) but is it correct you trying to logon to the 'dm' account? Maybe try the example they provide and go to the xdemo account?

d3py.logon({machine}, {user}, {userPassword}, {account}, {accountPassword})

also, just try doing a TELNET to {machine} and type the user "dm" and see what it prompts with, if it then asks account maybe enter the {account} field (if password first then {userPassword} just to see if it is a flow in the function?)

@Mike Young - The Telnet session all good - so there is no "problem" here to logging into account.
I will attempt what you suggest to log to another account (like xdemo)

Thanks