The System Trace facility is used to record a sequence of system events, function calls, or data in a fixed-size circular buffer as requested by calls to its API's. The buffer must be allocated during the processing of CONFIG.SYS.
If you have a TRACEBUF statement in CONFIG.SYS, a trace buffer is allocated, allowing you to use the TRACE command successfully later.
If any valid TRACE statements are in CONFIG.SYS (including TRACE=OFF), a trace buffer will be allocated for the default size of 4K, if TRACEBUF is not specified. This means that the statement TRACE=OFF will actually enable system tracing, which seems counter-intuitive to many people.
If you do not specify TRACE or TRACEBUF statements in CONFIG.SYS, OS/2 does not allocate a trace buffer and system tracing is disabled.
After the trace data is recorded, the trace formatter is used to retrieve the data from the system trace buffer and present it on your display, and optionally, to print it, or save it in a file.