Hadrian, your mod set-up should look like this:
With respect to Epic Heroes Mod you should see the DM file "Epic Heroes Mod 1.5" and a yellow folder named "ehspr". They should be visible when you open up mods under Dom III.
They should not be inside a yellow folder. If they are. Drag them out and destroy the yellow folder containing them.
* Ignore the other DM files and folders I have in my mod section as those are not relevant to this game. And you do not need a second DM file called Epic Heroes Mod as pictured above(that is an older version).