lastdrive=L
where L is the last letter that will be available.
By default, FreeDOS will set L high enough for all floppy drives and detectable hard drive partitions, plus one for a CD or other drive.
You may want to set L higher if you wish to use more than one drive that FreeDOS cannot detect automatically (CD drives, zip drives etc.)
Setting L higher than necessary wastes a small amount of memory.
lastdrive=z