DR-DOS version 5.0 was released in May 1990. Version 4 was skipped to avoid being associated with the relatively unpopular MS-DOS 4.0. This introduced ViewMAX, a GEM based GUI file management shell, and bundled disk-caching software, and also offers vastly improved memory management freeing up critical "base" or conventional memory - the first 640KB of the PC's RAM in which all MS-DOS applications run.

Additionally, on Intel 80386 machines, DR-DOS's EMS memory manager allowed the OS to load DOS device drivers into upper memory blocks, further freeing base memory. DR-DOS 5 was the first DOS to integrate such functionality into the base OS.

Faced with substantial competition in the DOS arena, in May 1990 Microsoft responded with an announcement of MS-DOS 5.0, which would be released in June of 1991 and include similar advanced features to those of DR-DOS. It included matches of the DR's enhancements in memory management.