Thank you for your reply. When I added the CAD drawing to the map without loading it into the geodatabase, I was able to view the file in the target layer box and georeference it.
I am however, having trouble saving the transformation changes and loading the transformation changes into ArcSDE. I am not sure if I am understanding how to do this from the notes online. After I update georeferencing, will the CAD drawing only save its position and size for this map? It seems as if this is the case. I am wanting to save this like every other feature class. When I add it from the database, I would like it to display in the location that I have georeferenced.
I know that there is the CAD to Geodatabase tool, but since my georeferenced is not saved properly, I am not sure how to do this.
I did find that I can save the changes as a layer, but am not sure how to put this layer into my geodatabase.
Hope this makes sense.
Help would be appreciated.