After finding a few others that had this issue it seemed to be that “SQLServerWriter” is not registered so DPM cannot use database level snapshots and only use volume snapshots. I had this issue with DPM 2010 and SQL Server 2008 R2. From reading the other issues it seems to be limitation by the SQL Server VSS Writer and spaces in the database name. So that would affect any version of DPM and any version of SQL that includes SQL VSS writer that continued to function this way.
Batch Script to determine is the correct services are running.
sc query VSS
sc query SQLWRITER
sc query DPMRA
VSS Command to verify SQLSERVERWRITER has registered. This command requires Administrator Elevation. In your results should include writer name: 'SqlServerWriter' .
vssadmin list writers
SQL Script to Detect which database has a space at the end of the name.
select name from sys.databases WHERE right(name,1) = ' '
Below is a script includes all checks if your SQL Server has powershell enabled.
DPM 2007 / SQL 2005
DPM 2010 / SQL 2005