Hi,

>   1. DOS (100Mb)
>   2. NetBSD (800Mb)
>   3. NetBSD (700Mb)
>  
> since the system was/is installed in partiton 2, is there a way
> to make a file system on partition 3 and mount it under the exsiting
> file system OR I have to reinstall it using single partiton of 1500Mb?

how about man newfs? You can install a ffs filesystem on partition 3 with
it.
man mount will tell you how to mount this partition under the root
partition. If you want to use it permanently, add an entry to /etc/fstab.
see man fstab on how to do this.

> Any pointers will be appreciated.

Manuals can be helpful sometimes (actually quite often :-).
Also, have a look at the BSD-FAQ. A book about system administration will
be fine as well. Have a look at 'Essential Systemadministration' from
O'Reilley.

  Guenther