ok ive not had an amiga for years but lots of knowledge still resides in my skull.
right... im glad you got your head around unpacking to DF1: etc..
do you want to unpack to a 'virtual' floppy drive?? at the height of my amiga skills i almost NEVER used floppies for unpacking DMS files (although in theory this is the only way).
Go to aminet and get FMS (FileMasher I think was the name) or a similar solution.
This works much like the DOS driver solution you've been poking around with, which is used for CD0 and PC0 etc. The drive name created with this solution is FF0: and FF1: etc.
The difference being it copies the data to a 'virtual' floppy which can be placed on your hard disk or even in RAM. The virtual floppy, simply put, is like a virtual memory file in windows.
If you place this virtual file in RAM, you will obviously destroy the virtual floppy when you reset. There is one difference between FMS in RAM and the RAD disk mentioned earlier.. RAD should still be there when you reset (accelarator permitting) and FMS placed in RAM isn't.
If you place it on your hard disk, when you mount it next time, it'll be as if you inserted the disk in the drive!!
However, if the disks have non-custom boot-blocks (the NDOS disks the you can only run with ease when you put them in your floppy drive and reset the Amiga), you won't be able to read them much like you can't when you use real floppies in Workbench.
And the best bit? No bad blocks and the floppies unpack in seconds!
And I REALLY recommend you install KingCON from Aminet. It's not hard, you just have to add a few (simple) lines to your user-startup or startup-sequence (found in S:). these are the autoexec.bat's in Workbench.
It will totally amaze you with the control and ease of use it provides! Imagine if you can't be bothered to type the path or filename of a command or file.. you just press TAB and a file requester pops up prompting you to find it.
Or just type in the first few letters and press it.. it'll autocomplete it!! great for mathiieeedoubbas.library or whatever it was!
Sigh... I miss my Amiga and it's shell..
Another tip.. get OS3.9