Jeffrey thanks for your reply. Apologies for the delay in replying but I have been through numerous steep learning curves to understand and resolve the issue.
I am now able to connect to the database. The main problem (I think) was that I was using a down level version of DreamFactory. I used the version that can be searched for with Azure which is 1.6 or 1.7. To resolved the issue I deleted all my Azure components and restarted from scratch using the version from VM Depot. (I would have liked to use the 1.9.4-3 version however the Deployment Tutorial link (https://vmdepot.msopentech.com/tutorial/deploy/58928.html/) didn’t work). I settled for 1.9.4-2.
One other contributing factor was that I needed to specify the UserName as username@domain format.
Once again thanks for your help.