The default size for drive C: in DosBox when you mount it is, I think, something about 100MB, for some games it is too little. To make more space available on drive C: mount it like this:
mount c c:\ -freesize X (where X is the emulated size of drive C: in Megabytes)
For example -freesize 800 should be more than enough for every game. Also when you have installed Daggerfall, you'll encounter problems starting the game from anything other than a 100% original CD, unless you start it not with dagger.exe but with fall.exe z.cfg and modify the line pathCD in z.cfg file to where the folder arena2 is located within the mounted ISO, for example:
pathCD e:\dagger\arena2
Better yet you simply copy the folder arena2 from the ISO to the same folder where your game is installed then you don't need to mount the ISO to play the game, simple modify z.cfg like this, for example:
pathCD c:\games\dagger\arena2
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