Hi, Uttam,
Probably, one option for this application will be to use the NIAlarmEvent Browser ActiveX object that installs when you install the LabVIEW DSC Module. This is basically the same object as the Alarm & Event Display object in a VI's Front Panel. To use it, I will recommend you to place one in LabVIEW and see the different properties and methods that get called in the Block Diagram for it. I personally have never tried to call it from an environment outside of LabVIEW, but I believe it should be fine.
The second option, as you suggested, could be to create a DLL out of a DSC VI. Again, that should be possible. You could have the Read Tag and Write Tag VIs inside your code, and also any VIs used to retrieve alarm information. Attached to this post, you will see the VIs and the DLL that I created. In my example, I am just writing and reading one value from a simulated OPC server (one that installs with LabVIEW), and I'm also looking for alarms on the tag being written. Just for testing purposes, I tried calling the DLL from the same LabVIEW environment and that worked just perfect. The only thing you need to make sure is that you place the DLL files in the same directory where the DSC Engine is located (by default it is C:\Program Files\National Instruments\LabVIEW 7.1\.
I hope this helps!
GValdes