Problem: ArcGIS displays special characters and format codes in CAD annotation strings
When viewing CAD drawing text and CAD annotation features in ArcGIS, extraneous characters may precede CAD annotation strings.
AutoCAD and MicroStation require the use of special characters and format codes to represent symbols and to customize the appearance of text strings in a CAD drawing. ArcGIS reads the entire text string in a CAD drawing, which includes special characters and format codes. Because of this, the display of CAD drawings in ArcGIS may differ from that of the originating CAD software package. For example, representing the symbol for diameter (i.e., �w) in AutoCAD requires that you enter ¡¥%%c¡¦. Although this displays as a diameter symbol inside AutoCAD, ArcGIS reads and displays this symbol as ¡¥%%c¡¦.
Solution or Workaround
In order to remove the extraneous characters from the annotation text, you will need to convert the annotation to a form that is editable in ArcGIS. There are two approaches to this problem.
One approach is to directly convert the CAD annotation to geodatabase annotation.
This approach will result in annotation that looks most like the existing CAD annotation. One drawback to this method is that each piece of annotation with extraneous characters will need to be individually edited by hand.
For directions, see the ArcGIS Desktop Help topic "Converting coverage annotation to geodatabase annotation".
Another approach is to import the CAD annotation into a geodatabase feature class as point features. The advantage of this approach is that you can change the annotation text strings by bulk selection and modification of the fields in the feature attribute table. After you have removed the extraneous characters from the text strings, you can label the features in ArcMap. You can keep the annotation text as labels or convert it to geodatabase annotation. If you have an ArcInfo or ArcEditor license, you can also create feature-linked annotation from the labels.
For directions, see the ArcToolbox Help topic "CAD to geodatabase" and the ArcGIS Desktop Help topic "Converting labels to annotation".