When you run winnt with the /b option, two temporary directories are created: the $WINNT_$.~LS directory, which holds a copy of the installation tree, and the $WINNT_$.~BT directory, which holds all the boot files that are normally on the Windows NT setup boot floppy disks. This second temporary directory must be on your boot drive (C:) and requires approximately 4 to 5 MB of uncompressed space to hold the files needed by Windows NT to boot and load Setup. If you do not have this much uncompressed space on your boot drive, run winnt without the /b option. This creates three boot floppy disks instead of using space on drive C: for the boot files.
Whether or not you use the /b option, you will need about 1 MB of uncompressed space on drive C: for the files: NTLDR, NTDETEC.COM, BOOT.INI, and BOOTSECT.DOS.