dmcolor.dll is a Win Me system file and you should be able to extract a
new copy from the Win Me cab set as follows.

dmcolor.dll is contained in DRIVER5.CAB of the Win Me cab set and can be
restored using MSConfig | General | Extract File ... and following the
prompts.   The "cab" files are in the Win9x folder on the Win Me CD and
also in either C:\Windows\Options\Cabs (if an OEM install) or
C:Windows\Options\Install (if installed using a Microsoft Win Me CD).  See
MS KB129605 - "HOW TO: Extract Original Compressed Windows Files"
(http://support.microsoft.com?kbid=129605).

dmcolor.dll belongs in the C:\Windows\System folder.