I don't think the setup program can be used in that manner. If I run it from within the DOS folder I am merely instructed that I should run it from floppy.
To install MS-DOS, insert Setup Disk 1 in
drive A and press CTRL+ALT+DEL. This will
restart your computer and begin the Setup
program.
Or press ENTER to return to your command prompt
Running setup from the diskette should do the trick. Would certainly be the easiest way of doing it.
It is also possible to install it manually. The instructions are either in the manual or the readme, though don't really go much further into it beyond telling you to use EXPAND.EXE on all the files, which would mean doing them one at a time.
One might be able to create a batch file for converting a file using EXPAND.EXE, then use that to batch-expand all the files needed. This can be done with two batch files. The first one would be called by the second one here, given the compressed extension and the expanded extension. it creates a temporary folder, copies the files with the specified extension to it, renames them to remove that extension, runs expand on those files and expands them to the second extension, then copies them back into the parent folder:
EXPLOOP.BAT:
@echo off
mkdir TMP%1
copy *.%1 TMP%1
cd TMP%1
RENAME *.%1 *.
for %%P in (*.) do C:\DOS\EXPAND.EXE %%P %%P.%2
copy *.%2 ..
REM del *.*
cd ..
REM rmdir TMP%1
The deletion commands are commented out here. DELTREE cannot be presumed available since it might still be compressed and running a bunch of del commands in a batch never ends well in my experience, so if going this route probably better to erase the temporary folders manually afterwards.
EXP.BAT
CALL EXPLOOP CO_ COM
CALL EXPLOOP EX_ EXE
CALL EXPLOOP DL_ DLL
CALL EXPLOOP HL_ HLP
CALL EXPLOOP SY_ SYS
CALL EXPLOOP CP_ CPI
Which covers most of the compressed files. Course typing these out into EDIT would take longer than just running setup from the floppy.