I'm pretty sure you need to extract the disk to an Amiga floppy disk instead. You have CrossDOS up and running, so I would do the following:
First mount PC0: so you can access the DMS file, and then copy the DMS file to RAM: disk (or harddrive if you prefer this instead). Then extract the DMS file to Amiga floppy using this line
DMS write (filename.dms)
That's nonsense. How could crossdos read such floppy, it wouldn't be proper format.
