Create SDE Connection

1) Open ArcCatalog. ( Start > Programs > ArcGIS > ArcCatalog )
2) Expand "Database Connections" node in the Table of Contents.
3) Double Click on "Add Spacial Database Connection".

4) Fill out form as below. (Password is "DOTDUser1")
5) Click "OK".

Your connection to ArcSDE is now complete.
This image shows the connection created under "Database Connectins".
You are ready to add data from ArcSDE to your map document.