1. In a Windows 95 "DOS Box": This is the easiest way to run DOS programs in Windows 95. You can create shortcuts, set properties, and run them from "Start/Run." Etc.Note that under "properties" you CAN customize each DOS program shortcut as needed with a custom config.sys and autoexec.bat file, run it via "MSDOS Mode" etc, etc. I feel this is a huge waste of time. I load everything my DOS apps need in the real config.sys and autoexec.bat files once just like with older DOS versions!
2. In Windows 95 "MSDOS Mode": This special mode, new in Windows 95, allows you to run DOS programs that don't like being run in a "DOS Box." With this mode you get a little better emulation of real DOS and usually a little more free conventional memory for DOS apps. But-this mode has full blown Win95 lurking in the background. To exit "MSDOS Mode" you do not reboot your computer, you type "EXIT" at a command prompt.
IMPORTANT: There is that a very special batch file called DOSSTART.BAT in your \WINDOWS directory is executed ONLY when you run a program in "MSDOS Mode" or "Shutdown/Restart in MSDOS Mode." Usually, the Windows 95 setup will REM out your real mode mouse, CDROM (MSCDEX.EXE) and soundcard drivers in your original CONFIG.SYS and AUTOEXEC.BAT files and copy some of these lines to your DOSSTART.BAT. My DOSSTART.BAT is basically empty-I load all my needed real mode, DOS level drivers in my autoexec.bat or config.sys files.
Check your DOSTART.BAT and see what is in it before you try playing with MSDOS mode. If you used my Windows 95/DOS Tips you do not need any drivers loaded in DOSSTART.BAT because we loaded all of them in the Win95 AUTOEXEC.BAT.
3. From a boot up Win95/DOS7.0 "DOS prompt": There are some DOS programs, especially games, that will not run from a "DOS Box" but may either run OK but slower or not at all in "MSDOS Mode" because of the overhead of Win95 lurking in the background. For such DOS software-I recommend booting to a DOS prompt and running these apps from there.
With few exceptions, you can edit your Win95 MSDOS.SYS file to have it give you a "Boot Menu" at startup so you can either go into the GUI ("Normal") or boot to "Command Prompt Only." This prompt is just plain "DOS7.0" without Windows 95 "lurking" in the background. See my Windows 95/DOS Tips for details.
Summary: So then-you can run any DOS programs from "within" Win95 or from the boot up "DOS7.0" prompt. Some programs take a little fiddling but they will work! What do I do? I have my system set up to go to the Windows 95 "Boot Menu" with a delay of 10 seconds and use "Normal" as the default choice. I also have it set up that I can boot my old DOS (MSDOS 6.22) from this menu. I run all my DOS games with the "Command Prompt Only" choice.