Hello pete_pumpkin,
Hardboy is right about the extracting part.
With DOpus:
You can have this problem if you specify a destination with spaces inside the volume name.
So DMS will ask for DF0: instead your PC1: device.
If I get it right: your DF0: is broken, but you've got an external drive DF1:?
The next point of Hardboy about virtual drives:
On Aminet you can find FMS V2.0.
If you install this good software, you can create a virtual floppy in your Ram: (that is the available memory). Usually this "drive" is called FF0:
Now you can extract your DMS file to FF0:
One problem though: if you have a DMS file of a NON Workbench floppy (with this I mean the floppy doesn't have icons etc. to display on Workbench but is meant to startup from) you will not see anyting in your FF0: device.
Good luck! :-)
Spidey