http://www.cisco.com/univercd/cc/td/doc/product/software/ios122/122cgcr/fwan_c/wcffrely.htm#wp1002008 Note that in our version of code on R1, the "ppp Virtual-Template1" at the end of the frame-relay interface-dlci command gets "lost" in the config. This is a code issue, this needs to be configured otherwise your Virtual Template will not come up. R1#sh run | b user ! username R3 password 0 PinkCadillac ! ! interface Serial0/0 no ip address encapsulation frame-relay no fair-queue ! interface Serial0/0.1 point-to-point frame-relay interface-dlci 103 ppp Virtual-Template1 ! interface Virtual-Template1 ip address 208.28.1.1 255.255.255.248 ppp authentication chap ! R3#sh run | b user ! username R1 password 0 PinkCadillac ! interface Serial1/0 ip address 208.28.1.2 255.255.255.248 encapsulation frame-relay ip split-horizon no fair-queue frame-relay map ip 208.28.1.2 302 frame-relay map ip 208.28.1.3 302 frame-relay interface-dlci 301 ppp Virtual-Template1 no frame-relay inverse-arp ! interface Virtual-Template1 ip unnumbered Serial1/0 ppp authentication chap !