Normally it works like this:

1) Copy the DNN installation to you local machine
2) Backup the database from the production machine and restore it on your local SQL Server.
3) Set up a web site that points to your local DNN installation (the copy from 1)
4) Adapt the connection strings in web.config
5) adapt the portal alias in the PortalAlias table
6) adapt the permissions on SQL Server and the local file system that it gives the AppPool account dbowner access to the database and modyify permissions on the file system
7) if you use a hostheader (e.g. devdnn.local) in 3) and 5), add this to your hosts file (in C:\Windows\system32\drivers\etc).

Best wishes
Michael

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