Problem:

Running a Cobol application on a Windows 2000 machine fails with an error that says it was not able to find SHELL.DLL

Resolution:

Make sure to apply Service Pack 4 (SP4) on Windows 2000.

Prior to SP4, SHELL.DLL was placed in c:\\winnt\\system32\\dllcache, and it is not in the PATH environment variable. This DLL on the other hand is in c:\\winnt\\system32 with SP4, which is also in the system path.