What is it?
NT Virtual DOS Machine - ntvdm.exe

What does ntvdm.exe do?
In Windows 2000, by default, all active 16-bit Windows applications run as separate threads in a single multithreaded process called NT Virtual DOS Machine (NTVDM). The NTVDM process simulates a 16-bit Windows environment complete with all of the DLLs called by 16-bit Windows applications.

Microsoft's information page.

Virus Precautions:
You'll want to keep an eye on this google search for any known viruses. The normal location of ntvdm.exe is C:windowssystem32ntvdm.exe


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