I have gone through the steps provided by Microsoft at the link below. 
http://technet.microsoft.com/en-us/library/hh824910.aspx

I have even done this before, but for some reason I am getting the error "The apply-image in Unknown" Error: 87 from the command below.  Does anyone know what I have done wrong?

Dism /apply-image /imagefile:e:\sources\install.wim /index:1 /ApplyDir:o:\

Full error:
2012-09-05 08:01:46, Info                  DISM   PID=6696 TID=2728 Scratch directory set to 'C:\Users\u0153965\AppData\Local\Temp\'. - CDISMManager::put_ScratchDir
2012-09-05 08:01:46, Info                  DISM   PID=6696 TID=2728 DismCore.dll version: 6.2.9200.16384 - CDISMManager::FinalConstruct
2012-09-05 08:01:46, Info                  DISM   PID=6696 TID=2728 Successfully loaded the ImageSession at "E:\sources" - CDISMManager::LoadLocalImageSession
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Found and Initialized the DISM Logger. - CDISMProviderStore::Internal_InitializeLogger
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Failed to get and initialize the PE Provider.  Continuing by assuming that it is not a WinPE image. - CDISMProviderStore::Final_OnConnect
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Finished initializing the Provider Map. - CDISMProviderStore::Final_OnConnect
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Getting Provider DISMLogger - CDISMProviderStore::GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has previously been initialized.  Returning the existing instance. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Getting Provider DISMLogger - CDISMProviderStore::GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has previously been initialized.  Returning the existing instance. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Manager: PID=6696 TID=2728 Successfully created the local image session and provider store. - CDISMManager::CreateLocalImageSession
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Getting Provider DISMLogger - CDISMProviderStore::GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has previously been initialized.  Returning the existing instance. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM.EXE:
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: <----- Starting Dism.exe session ----->
2012-09-05 08:01:46, Info                  DISM   DISM.EXE:
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Host machine information: OS Version=6.1.7601, Running architecture=amd64, Number of processors=4
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Dism.exe version: 6.2.9200.16384
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Executing command line: Dism  /apply-image /imagefile:e:\sources\install.wim /index:1 /ApplyDir:o:\
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Getting the collection of providers from a local provider store type. - CDISMProviderStore::GetProviderCollection
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has not previously been encountered.  Attempting to initialize the provider. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Loading Provider from location E:\sources\FolderProvider.dll - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Connecting to the provider located at E:\sources\FolderProvider.dll. - CDISMProviderStore::Internal_LoadProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has not previously been encountered.  Attempting to initialize the provider. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Loading Provider from location E:\sources\WimProvider.dll - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Warning               DISM   DISM Provider Store: PID=6696 TID=2728 Failed to Load the provider: E:\sources\WimProvider.dll. - CDISMProviderStore::Internal_GetProvider(hr:0x8007007e)
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has not previously been encountered.  Attempting to initialize the provider. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Loading Provider from location E:\sources\VHDProvider.dll - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Warning               DISM   DISM Provider Store: PID=6696 TID=2728 Failed to Load the provider: E:\sources\VHDProvider.dll. - CDISMProviderStore::Internal_GetProvider(hr:0x8007007e)
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has not previously been encountered.  Attempting to initialize the provider. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Loading Provider from location E:\sources\ImagingProvider.dll - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Warning               DISM   DISM Provider Store: PID=6696 TID=2728 Failed to Load the provider: E:\sources\ImagingProvider.dll. - CDISMProviderStore::Internal_GetProvider(hr:0x8007007e)
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Provider has not previously been encountered.  Attempting to initialize the provider. - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Loading Provider from location E:\sources\CompatProvider.dll - CDISMProviderStore::Internal_GetProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Connecting to the provider located at E:\sources\CompatProvider.dll. - CDISMProviderStore::Internal_LoadProvider
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Got the collection of providers. Now enumerating them to build the command table.
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Attempting to add the commands from provider: DISM Log Provider
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Attempting to add the commands from provider: FolderManager
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Attempting to add the commands from provider: Compatibility Manager
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Succesfully registered commands for the provider: Compatibility Manager.
2012-09-05 08:01:46, Warning               DISM   DISM.EXE: Failed to load WimManager. Try running from the Deployment Tools Command Prompt. If the issue persists, ensure that wimgapi.dll and wimserv.exe are up to date.
2012-09-05 08:01:46, Warning               DISM   DISM.EXE: Failed to add any commands.
2012-09-05 08:01:46, Error                 DISM   DISM.EXE: No providers were found that support the command(apply-image). HRESULT=0
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: Image session has been closed. Reboot required=no.
2012-09-05 08:01:46, Info                  DISM   DISM.EXE:
2012-09-05 08:01:46, Info                  DISM   DISM.EXE: <----- Ending Dism.exe session ----->
2012-09-05 08:01:46, Info                  DISM   DISM.EXE:
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Found the OSServices.  Waiting to finalize it until all other providers are unloaded. - CDISMProviderStore::Final_OnDisconnect
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Disconnecting Provider: FolderManager - CDISMProviderStore::Internal_DisconnectProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Disconnecting Provider: Compatibility Manager - CDISMProviderStore::Internal_DisconnectProvider
2012-09-05 08:01:46, Info                  DISM   DISM Provider Store: PID=6696 TID=2728 Releasing the local reference to DISMLogger.  Stop logging. - CDISMProviderStore::Internal_DisconnectProvider

TIA

Paul

Did you find a solution to this issue? I am also having this problem...

I'm having the exact same problem. MSDN documentation updated this year still speaks of this command so I don't think it's removed but rather not working for us because of a bug.

Same issue here.

I think that I may have identified a possible cause for this error.  I opened the isntaller in GUI mode to see what would happen and I noticed the following error:

My observation is that image file name/path passed via command line is case sensitive. If I pass it in exact case then the error "The applyimage option is unknown." does not occur.