A disk cache (also called Virtual Cache or just simply vcache in Win95/98) is important for improving hard disk performance. This is because the disk cache caches or stores data from the hard disk in the much faster RAM so that if a program requires that piece of data, it can just access the disk cache for it, instead of loading from the hard disk. The disk cache can also read ahead by copying more data than what the program asked for in the assumption that the following consecutive data segment will be needed next. These are some of the methods employed by the disk cache to improve your hard disk's performance.

By default, Win95 grabs most of the unused RAM at boot-up to use as disk cache. Then, it is supposed to release the RAM used for the dynamic disk cache when a program requires it. This is a rather fine idea as the unused RAM is better utilized as a disk cache rather than just left there. However, the problem with Win95's newfound affinity for disk cache is that it refuses to free up the RAM when you run a memory intensive program. Instead of releasing the RAM it grabbed at boot-up for the program to use, it releases some and forces the program to use the swapfile for the rest of its memory requirement instead.

Naturally, this degrades performance as the program now has to use the much slower swapfile, instead of the RAM. Also, it was found that increasing disk cache had diminishing gains. That means that increasing your disk cache from 32MB to 64MB of RAM won't boost overall hard disk performance as much as an increase from 4MB to 8MB of RAM. On the other hand, many programs' performance are degraded when deprived of RAM by the disk cache and forced to run using the swapfile. Hence, it is now important for us to control how much RAM is allocated to the disk cache so that there is a balance between hard disk and program performance.