The project has been running ever since Microsoft said it would abandon the operating system when it moved to Windows 95. That was Microsoft's claim at the time, anyway. However, it didn't really abandon DOS in Windows 95, but just hid it under the covers.
Jim Hall suggested that someone come up with an open source replacement. He wrote a manifesto that said, "I would like to form a group that will, eventually, create another implementation of MS-DOS. DOS appears to be a popular system, and there is plenty of hardware already available that is ready to support it."
"Microsoft will not develop DOS forever, and one cannot count on commercial programming firms such as IBM or Digital to continue DOS," he wrote.
He felt it was up to those on the Internet to develop their own DOS and thought that there would be a lot of support for that type of project.
Pat Villani and Tim Norman joined the project. The three built a kernel, command line interpreter and core utilities based around code they had written or found.
They called it "PC-DOS" to differentiate it from Microsoft's MS-DOS. By July 16 1994, the project changed its name to "Free-DOS", and finally to "FreeDOS" in 1996.
After 15 years the system is still on version one. However it has had some success. FreeDOS is used in emulators, for playing old DOS based games and in business. IBM and Dell have bundled it with some of their hardware and software products.
It is also seen as a useful tool for upgrading old computers, such as for flashing BIOS programs.