In the latter part of 1986, Commodore released a version of the "Commodore 128D
" in North America and Europe referred to as the Commodore 128DCR (Cost Reduced). The DCR model featured a stamped steel chassis in place of the plastic version of the C128D (with no carrying handle), a modular switched-mode power supply similar to that of the C128D, as well as a removable keyboard and internal 1571 floppy drive. On the mainboard, Commodore consolidated some of the components to save production costs and replaced the 8563 video controller with the more technically advanced MOS Technology 8568 (which was also fitted to a few D-models). As a cost-saving measure, the cooling fan that was fitted to the D model was removed, although the mounting provisions on the power supply subchassis were retained.
Inside, the C128DCR ROMs, the 1986 ROMs, so-named from the copyright date displayed on the startup screen, contained fixes for several bugs including an infamous one where the 'Q' character would remain lowercase when CAPS LOCK was active—and the 8568 VDC was equipped with 64 KB of video RAM—the maximum amount addressable by the chip, equal to four times that of the original C128. The increase in video RAM made it possible, among other things, to generate higher-resolution graphics with a more flexible color palette, although little commercial software took advantage of this capability.
Despite the improvement in the RGB video capabilities, Commodore did not enhance BASIC 7.0 with the ability to manipulate RGB graphics. Driving the VDC in graphics mode continued to require the use of calls to screen editor ROM primitives (or their assembly language equivalents), or by using third-party BASIC language extensions. The most popular such toolkit was Free Spirit Software's BASIC 8, which added high-resolution VDC graphics commands to BASIC 7.0. BASIC 8 was available on two disks (editor disk and runtime disk) and with a ROM chip for installation in the C128's internal Function ROM socket.