I don't think VFP likes it when you add the extension .dbc. Try:

SET DATABASE TO catc


>Hello group
>
>The following code is in my setup program
>I am a foxpro seminewbie
>SET DEFAULT TO c:\baccboe
>SET PATH TO :\baccboe; .\Bitmaps; .\DATA; .\FORMS; .\HELP;
>.\INCLUDE; .\Libs;.\MENUS; .\OTHER; .\Progs; .\Reports
>SET PROCEDURE TO jw_procedures
>SET CLASSLIB TO cisd
>OPEN DATABASE catc.DBC
>SET DATABASE TO catc.DBC
>
>The catc.DBC is in the c:\baccboe\data\catc.DBC
>I get a DATABASE NOT OPEN error when the SET DATABASE TO catc.DBC
>
>Thanks
>Jim