The Ultima III Upgrade Patch adds EGA 16-color, the complete musical score of the C64 version and other features to the IBM PC version of Ultima III. Both things had been impossible at the time, creating the worst port of the game. The patch elevates it to the best. It also fixes several bugs of the original and adds new hotkeys (such as exit to DOS).
One problem is, that the u3cfg.exe needs dpmi, which DosBox doesn't provide. You can find a substitute here. Unpack it and make sure that all the files are in the root directory of the game (no sub-folders). Now the u3cfg should work.