>If I define testproc in myprocs.prg and set procedure to myprocs.prg in the main program of the exe,

Does this succeed ? myprogs.prg $ set('proc') --- if yes, just DO testproc, otherwise look for the reason

>when I try DO testproc IN mytest.exe I get a "Procedure 'testproc.prg' does not exist". Looks like the "set procedure to" command does not get called in this case.

nahh, fox probably thinks you are specifiying "IN mytest.exe" to look there for a top level program.
I am not certain on setting a procedure file inside another exe - if that does not work, create a small setproc load function in mytest.exe that you call once on startup of myembellished.exe: do setprocfunc in mytest.exe.

HTH

thomas