DFSMSdss supports encryption for DUMPs.  I believe you need the software
encryption facility on your system and then a license to allow DSS to use
it.  Usage is explained in the z/OS V1R11.0 DFSMSdss Storage Administration
guide.

 DFSMSdss can use the following types of host-based encryption to secure
your data:

    * Triple-length Data Encryption Standard (TDES) clear keys
    * Secure TDES keys
    * 128-bit Advanced Encryption Standard (AES) clear keys. 

If extra CPU cycles are available then host based encryption can be a good
solution. If not, hardware encrypting tape drives are a good option if that
is a concern.  The hardware encrypting tape drives actually encrypt in
real-time as the data is written to the tape.  

Just wanted to let you know the options out there in regards to DFSMSdss.

Justin Eastman 
IBM z/OS DFSMSdss Development

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