User right on W2Kserver on NT4 domain

I have a small network with an NT4 machine as the PDC. There is one Windows 2000 server on the network that does not have active diectory installed. I am trying to set user rights to folders on the W2k server. I can find the domain that has the users/groups and add them to the security setting how ever they still do not have access. It’s as if the W2K server is not recognizing the users/groups even though it found them in the domain listing under the security tab. Does the W2K server need to bea domain controller? It would not seem logical seeing how it finds the users in the domain. Please help.