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Transaction manager has disabled its support for remote/network transactions

Last Updated: 1/6/09

First verify the "Distribute Transaction Coordinator" Service is
running on both database server computer and client computers

1.      Go to "Administrative Tools > Services"

2.      Turn on the "Distribute Transaction Coordinator" Service,
        if it is not running.

If it is running and client application is not on the same computer as
the database server, on the computer running database server

1.      Go to "Administrative Tools > Component Services"

2.      On the left navigation tree, go to:
 "Component Services > Computers > My Computer"
 (you may need to double click and wait as some nodes need time to expand)

3.      Right click on "My Computer", select "Properties"
4.      Select "MSDTC" tab
5.      Click "Security Configuration"
6.      Make sure you check "Network DTC Access", "Allow Remote Client",
"Allow Inbound/Outbound", "Enable TIP" (Some option may not be
necessary, have a try to get your configuration)
7.      The service will restart
8.      BUT YOU MAY NEED TO REBOOT YOUR SERVER IF IT STILL DOESN'T WORK
(This is the thing drove me crazy before)

On your client computer use the same above procedure to open the
"Security Configuration" setting, make sure you check "Network DTC
Access", "Allow Inbound/Outbound" option, restart service and computer
if necessary.

On you SQL server service manager, click "Service" dropdown, select
"Distribute Transaction Coordinator", it should be also running on
your server computer.

Source:
http://social.msdn.microsoft.com/forums/en-US/adodotnetdataproviders/thread/7172223f-acbe-4472-8cdf-feec80fd2e64/



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