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bibtex from MikTeX 2.5.2406 ignores the settings of
BIBINPUTS, bib files are not found.
bibtex8 works fine and does find bib's in the path set
Similar with BSTINPUTS.
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The bug has been fixed. The fix will be made available with the
next update cycle. You can watch the MiKTeX project page
for further information on the next update.