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This issue has been reported on Windows Server 2012, and is assumed this may also occur under 2003 and 2008. Apparently, DBUPDATE completes the update on the reality database executing this command but does not write the information to the "dbversion" in the "Configs" folder seen in this database's directory structure..
This is related to Security and Permissions setup in Windows Server. When connected to a database through telnet the Reality process is running as Windows user “Reality User”. The login credentials for this user did not allow the Reality process to modify the "dbversion" file.
This can be recovered by modifying the file permissions to allow “Reality User” to update “dbversion” and then re-running DBUPDATE. This will write the relevant information to the "dbversion" file and complete the DBUPDATE process.
Note:
The recommended way to run DBUPDATE is to use the user's login that created the database, i.e. from a Windows Command prompt, rather than a telnet connection session. The Command Prompt is typically used when administering Reality, e.g. starting and stopping services, database creation and configuration etc…