Anyone have any ideas as to why a V7 system with Mpd card would be resetting itself randomly when a specific extension presses the DND button while on the phone to external callers?

Never experienced that particular issue. Sounds like you may have a bug in the software which would lead to something like a memory cartridge change, upgrade or some serious troubleshooting.

FYI it was resolved as you said. By updgrading the system. Thanks