If I have an unlimited LMS license, does that also apply to DFM ? Or is DFM limited to only so many managed interfaces ?
Unlimited never really meant unlimited. We still had supported device limits above which TAC would not be able to help. The license covers DFM, but as you say, DFM is limited more by the number of managed ports and interfaces than the actual device count. See http://www.cisco.com/en/US/docs/net_mgmt/ciscoworks_device_fault_manager/2.0_IDU_2.0.6/installation_windows/guide/ntprereq.html#wp1075725 .