Your operating system (OS) is the heart of your computer. Basically your operating system tells the computer what it can do and how to do most of it. Your software interacts with your operating system to allow the software to function.

Operating systems can offer a range of compliance problems with the Year 2000 (Y2K) situation. Microsoft, the producer of the most popular Operating Systems in the world claims that all it's OS's are fully Y2K OK. However, independent testing and press releases have indicated otherwise.

You need to know what your OS is in order to determine if it will be fully compliant with the year 2000. Once your know what your OS is, you can then read up on it and decide what you want to do about either retaining it, or upgrading it.

Refer to the Survive 2000 report to identify your Operating System. 

The vast majority of IBM compatible PC's use one or another Operating System supplied by Microsoft Corporation. Other systems in use are DR DOS - supplied by Digital Research and PC -DOS an early IBM version of MS-DOS.

Here, once again, you are going to have to make a valued judgment based on what you have, how much you want to spend and if you believe the word of Microsoft.
 

The following table is available HERE in full.

Operating System                                  Date Limit  | Date Format 
MS-DOSr file system (FAT16)                      2108              16 bits
Windows 3.x file system (FAT16)                  2108              16 bits
Windows 95 file system (FAT16)                   2108              16 bits
Windows 95 file system (FAT32)                   2108              32 bits
Windows for Workgroups (FAT16)               2108              16 bits
Windows NT file system (FAT16)                  2108              16 bits
Windows NT file system (NTFS)            future centuries       64 bits

However...

At http://www.compman.co.uk/features/yr2000articles.html#home you will find an article about how some versions of Microsoft's DOS are non Y2k Compliant.

AND.

Testing done by independent organisations have shown that the File Manager in Win 3.1 and Win 3.11 (Windows for Workgroups) show that the programs have problems handling four digits dates.

So...  It seems that the safest bet all round is to go to an Operating Systems that is PROVEN to work and to be stable. At this point in time, that Operating System is Windows 95, Ver 4.00 or later. And DO NOT use the Upgrades, use ONLY the full version unless you wish to experience unexpected errors and problems.

Now, before you go spending money on new Operating Systems, think about what hardware it's going to require. Windows 95, according to the box Windows 95 requires a minimum of a 386DX computer with 4mb RAM, 8mb recommended, PLUS to install the full program you will need between 35 and 60mb of hard disk space.

In reality, to run Windows 95 and take advantage of its features, you will need at least a 486DX66, with 8mb RAM, preferable 16 or even 32mb RAM.  So, if your current DOS based software (which is doing perfectly what it's supposed to do) is running on a 286 or 386sx or DX, frankly, you're up for a substantial cost to make it Year 2000 compatible.

Then, if you decide to follow the advice offered by Microsoft and migrate all your software to Windows 97, you will have to once again consider the implications of hardware. Because, Win 97 looks like needing 32mb, (possibly 64mb for any real performance) and requires at least 80mb of hard disk space to install.

Which all means...  you really need to think about the total computer before you do anything about upgrading any part of it.