>>If you have it running under MTS, by default, it is now an out-of-proc server. Unless I misunderstand the concept behind MTS (and that could be true).
>>
>That's an interesting point, Larry. I think it is "in process" in the sense that it is running in the MTS package process MTS (MTX.exe) creates for it. I.e. when the client instantiates the DLL, MTX.exe on the server is actually invoked which, in turn, launches the DLL. So from the client's perspective, I guess it would be "out of process", while form MTS's perspective it is "in process." If I've missed something here, I would appreciate clarification since we are wrestling with some MTS issues at this very moment.

Determining whether a server running under a surrogate process is in or out of process is really semantics, and the answer depends on your context. You have a firm grasp on the difference...