DFS restriction?

I ve been using the DFS that comes with Windows Server 2003 Enterprise
recently upon being pointed to its existence by one of the members in this
group. Its pretty neat from what I ve seen so far but for this that seems to
be a filesystem design restriction or perhaps I m mistaken.

Server machine -> A
Root -> \server\Root
Link1 = Root1

Root1-> \MachineB\c$\work\abc

Machine -> B
c:\work\abc

Thats it. Now I can access this lil tree nice and fine from Server machine A
but when I try to access Link1 from Machine B it says n/w path not found. In
other words, is there a design restriction whereby you CANNOT use files on
your local machine using DFS ? Since in this case the Link is nothing but a
directory on the machine B and I m accessing Link from Machine B.

banks