Thank you for the replies. The consensus online and offline to my query seems to be phantom extensions. I've made a few attempts but so far have been unable to get it to work properly in a multi-DID scenario. I'm not sure yet if the failure point is Inter-tel, Perle modem, or fax software (Active Fax server).

I put the project on the backburner for a bit, but I plan to return soon. I have picked up single port Multitech modem that should be DTMF capable and I plan to test a couple different software packages. Zleviticus, what software and fax modem(s) are you using?