Does the feature class that you are using to create the network dataset have 3D coordinates? That is, does the shape field say it is polyline or "Polyline Z"? If it is not Polyline Z then it does not have Z coordinate (in addition to the X and Y coordinates) to build a 3D network. You will need to convert the data into polyline Z and add the right Z coordinates to make a 3D network as in the tutorial I mentioned.Jay Sandhu
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