One problem related to transfer case has been reported for the 2003 Dodge Dakota. The most recently reported issues are listed below.
On October 20, 2005 I was driving my 2003 Dodge Dakota quad-cab 4wd pickup back from visiting a friend when I sustained a catastrophic failure of the transfer case. This resulted in a complete loss of motive power. Vehicle was towed to the nearest Dodge dealer and repaired. Dealer claimed case was struck by something (implying abuse) which is unsupported by any physical evidence. The dealer's position prevented repairs being made under warranty. Investigation by an independent shop identified the source of the damage to be the coupling between the front driveshaft and the transfer case. Daimlerchrysler refuses to acknowledge the factual cause and adheres to the dealer's (erroneous) position.