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**This bug has been fixed at ArcGIS 9.3.**
The Dissolve tool returns incorrect results when the dissolve field is text, and contains uppercase and lowercase values.
This is a known issue in ArcGIS 9.0, 9.1, and 9.2 releases.
If the values of the field do not need to be uppercase and lowercase, edit the field values to make the case of the values consistent.
If the case needs to be upper and lower, follow the steps below to perform a Summarize on the dissolve field of the original dataset.