How to Create a DOS - bootable USB Memory Key within Windows

Method 1

If you do not have a floppy disk drive, you may want to create a bootable USB memory key which will allow you to boot into a pure DOS environment. This can be very useful if you want to flash your BIOS. Here is a step by step procedure on how to perform this operation.
NOTE: Your computer must support booting from a USB device in order to boot from the USB Memory Key.
Step 1 - Download and install the Windows based HP USB Disk Format Tool.
Step 2 - Download the Windows 98 system files from HERE. This is a zip file that contains all of the system files that you will need. Create a new folder and extract these files into the folder that you just created. Make sure that you preserve the directory structure.
Step 3 - Insert the USB Memory Key into the USB port of your computer.
Step 4 - Launch the HP format tool program.
Step 5 - Under the file system drop down list, select FAT32. This is important to do correctly.
Step 6 - Check the box next to Create a DOS startup disk.
Select "using DOS system files located at:" Then click on the square box with 3 dots on it.
Step 7 - Browse to the folder that you extracted the Win98 system files and then click on the OK button.
Step 8 - Now click the Start button.
Step 9 - You will receive a warning message. Make sure you have the USB memory key selected. If you are sure, then click the Yes button.
Step 10 - Your USB memory key is now being formated and the DOS system files will be copied onto it.

Once the program has completed the operation, click on the Close button.
You now have a bootable USB memory key.
On the USB memory key, you will see COMMAND.EXE, IO.SYS and MSDOS.SYS. These are the basic Win98 system files.
If you want to have CDROM support when you boot from your USB memory key, copy these files, including the CDROM folder to the memory key. These files are the ones that you extracted earlier to a folder.
If you copy all of these files to the memory key, you will have mouse support for any DOS program that support this feature.
You will also have many other DOS utilities that are very useful.

Method 2

Executing bootflashdos

No matter which method you applied. Don't forget to change BIOS setting. In BIOS->Hard Disk Boot Priority, select USB-HDD01 XXXXX as priority 1.

Reference : 1. How to create a boot disk