Creating XA connection on Windows with MSDTC may return SQL0998N

Symptom

1) You might get error messages in the db2diag.log

2014-04-21-12.24.43.626000-240 I3739F406 LEVEL: Severe
PID : 4432 TID : 8140 PROC : testconn20.exe
INSTANCE: DB2 NODE : 000
APPID : 109.109.109.109.690637.140421162441
EDUID : 8140
FUNCTION: DB2 UDB, XA DTP Support, MicrosoftXARMCreate, probe:364
DATA #1 : String, 69 bytes
HRESULT: 80004005
HRESULT Message: Unspecified error

ITransaction:

2014-04-21-12.24.43.626000-240 I4147F748 LEVEL: Info
PID : 4432 TID : 8140 PROC : testconn20.exe
INSTANCE: DB2 NODE : 000
APPID : 109.109.109.109.60637.140421162441
EDUID : 8140
FUNCTION: DB2 UDB, oper system services, sqlofica, probe:10
DATA #1 : SQLCA, PD_DB2_TYPE_SQLCA, 136 bytes
sqlcaid : SQLCA sqlcabc: 136 sqlcode: -998 sqlerrml: 21
sqlerrmc: 16 2-FFFFFFFF80004005
sqlerrp : SQLXACOM
sqlerrd : (1) 0x00000000 (2) 0x00000010 (3) 0x00000000
(4) 0x00000003 (5) 0x00000000 (6) 0x00000000
sqlwarn : (1) (2) (3) (4) (5) (6)
(7) (8) (9) (10) (11)
sqlstate: 58005

2) You are able to reproduce the error by running testconn utility with -dtc option:

testconn40 -dtc "database=dbName;server=serverName:portNumber;uid=userName;pwd=password"

Adding the MSDTC step:

Step 1: Printing version info
.NET Framework version: 2.0.50727.5477
64-bit
DB2 .NET provider version: 9.0.0.2
DB2 .NET file version: 9.7.5.2
Capability bits: ALLDEFINED
Build: 20111018
Factory for invariant name IBM.Data.DB2 verified
Factory for invariant name IBM.Data.Informix verified
IBM.Data.Informix from DbFactory is the Common Informix .NET provider
Elapsed: 0.6084117

Step 2: Validating db2dsdriver.cfg against db2dsdriver.xsd schema file
File C:\ProgramData\IBM\DB2\DB2COPY1\cfg\db2dsdriver.cfg missing. Nothing to validate
Elapsed: 0

Step 3: Connecting using "database=dbName;server=serverName:portNumber;uid=userName;pwd=password"
Server type and version: OS/390 10.01.0005
Elapsed: 2.028039

Step 4: Selecting rows from SYSIBM.systables to validate existence of packages

SELECT * FROM SYSIBM.systables FETCH FIRST 5 rows only
Elapsed: 0.3276063

Step 5: Calling GetSchema for tables to validate existence of schema functions
Elapsed: 3.1512606

Step 6: Creating XA connection

DB2TransactionScope: Failed to open connection to database!
IBM.Data.DB2.DB2Exception: ERROR [58005] [IBM][DB2] SQL0998N Error occurred during transaction or heuristic processing. Reason Code = "16". Subcode = "2-FFFFFFFF80004005".
at IBM.Data.DB2.DB2ConnPool.Open(DB2Connection connection, String& szConnectionString, DB2ConnSettings& ppSettings, Object& ppConn)
at IBM.Data.DB2.DB2Connection.Open()
at TestConn.DB2TransactionScope.Open(String connstr)

Looking for XADLL key for C:\Program Files\IBM\SQLLIB\bin\db2app.dll
Correct entry found
Check if XA Transactions are enabled:
Windows 7, 2008, Vista -
Component Services, Computers, My Computer,
Distributed Transaction Coordinator, Local DTC
Properties, Security tab, Enable XA Transactions
Other windows versions -
Component Services, Computers, My computer, Properties
MSDTC tab, Security configuration, Enable XA Transactions


Test failed.