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I tried many things and I have been searching for over an hour. I have tried to change sensitivity, disable joysticks, ctrl+F10. Nothing works
Here's the issue:

When I start a game, any game, I can lock the mouse into DOSBox to use in the game. When I move the mouse, the cursor for the game does not follow the xp cursor. The DOSBox cursor follows some vague path resembling the movement of the xp cursor, but it moves in odd arches and stays close to the edges of the screen.

I have tried this in four different games, all to the same effect.

[Scatty]

Download this Microsoft mouse driver for Ms-Dos and install the driver every time you start DosBox before doing anything else, means type in msmouse.exe to load it in memory and see if that helps with the issue. Better yet to include the line with the driver in dosbox.conf so it starts automatically every time you run DosBox.