Hahaha, I went the other way (Win$/Dos->Linux)...and I only look back when I can't avoid it.
Are you on Win98 etc? I assume you are, seeing you mention "DOS prompt". In this case, I guess the most obvious thing...are you aware of the difference between how DOS and Windows view file names? Do a 'dir' from the DOS prompt. You'll see a column that says something like "MS DOS Name", with entries like "PROGRA~1". You have to use these names to move in DOS. Dos names are 8 chars or less, with no spaces. There are probably other character restrictions I'm not aware of.
As for Explorer not showing a directory created in DOS...I dunno!
Which DOS are you using? Which is the co-worker using? Different ones behave differently. Did you start by choosing "Run ..." or by using the Start button? If you start DOS using "cmd", you'll get a different DOS than if you use "command".
Try cd-ing to the directory by using the first 6 letters of the dir and adding a ~1 on the end (e.g. Program Files becomes Progra~1).
As for Explorer not noticing the new dir, it happens -- sometimes even with a "refresh". Did you try to restart Explorer?
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