That's true only if the component was compiled using Delphi 3. If it's a Delphi 2 DCU file, it will tell you "Fatal Error" and complain about not finding an associated PAS file. In order to install such a component, you will need the source code and recompile the PAS file. There are two solutions to the problem: Have the vendor of the component re-compile the component with Delphi 3. If you have the source to the component, re-compile the component with Delphi 3 and use the resultant DCU.