p (absolute_directory_path\preproc.int) endp
For example:
p (c:\mfuser\projects\preproc\loadlib\preproc.int) endp
You specify the location of preproc.int in this way rather than in the $SET statement you deleted at step 10 because the preprocessor's parsing is quite basic and cannot handle the colon in the path-name.
You can now use the preprocessor.