I have 2 warnings

Don't use the Beta.

The official release was made some time ago:

http://drupal.org/node/200591

This bug is still present in 5.x.2.2, and even in the dev version.
The only place where you are permitted to have &$varname is in a function declaration.
As a compile-time warning, this message is not logged to the Drupal watchdog list, so you may be missing it.
When developing modules, please use a recent version of PHP and turn on logging of full PHP warnings in php.ini.
That means:
error_reporting = E_ALL | E_STRICT

All the following lines need the "&$"s changed to "$".

$ wget http://ftp.drupal.org/files/projects/dbfm-5.x-2.x-dev.tar.gz
$ tar xzvf dbfm-5.x-2.2.tar.gz
$ grep -IR '&\$' * | grep -vP ': *(function|\*)'
dbfm/dbfm_file.inc: $fred = dbfm_delete_recur($rec_to_delete, &$ret, &$err_array);
dbfm/dbfm_file.inc: $ret = dbfm_delete_recur($sdata, &$ret, &$err_arr);
dbfm/dbfm_properties.inc: if ($updateresult = dbfm_dbupdate_file($form_values['fid'], &$err_arr, $metadata) == TRUE ) {
dbfm/dbfm_properties.inc: dbfm_recur_dbrename($new_rec, $ret, &$err_arr);
dbfm/dbfm.module: $ret = dbfm_delete($frec, &$err_arr);
dbfm/dbfm.module: $perm_res = dbfm_perm_recur($frec, &$err_str);
dbfm/dbfm.module: $ret = dbfm_move($src_rec, $dest_rec, &$err_arr);
dbfm/dbfm.module: $dirlist = new dbfm_build_dir_list($frec->fid, '', &$err);
dbfm/dbfm.module: if (dbfm_dbupdate_file($dup_rec->fid, &$err, $metadata) == FALSE) {
dbfm/dbfm.module: if ($file_in_db = dbfm_dbinsert_file($parent_rec, &$err, $metadata)) {
dbfm/dbfm.module: $ret_val = dbfm_perm_recur($fkid, &$err_str);
dbfm/dbfm.module: $ret = dbfm_recur_dbrename($rootrec, $ret, &$err_arr);

Then the following lines:
dbfm/dbfm_file.inc:function dbfm_delete($rec_to_delete, $err_arr) {
dbfm/dbfm_file.inc:function dbfm_delete_recur($source, $ret, $err_arr) {
dbfm/dbfm_file.inc:function dbfm_move($source_rec, $dest_rec, $err_arr) {
dbfm/dbfm.module: function dbfm_build_dir_list($fid = '', $path = '', $err) {
dbfm/dbfm.module:function dbfm_dbupdate_file($fid, $err_arr, $metadata = array()) {

need changing as follows:
dbfm/dbfm_file.inc:function dbfm_delete($rec_to_delete, &$err_arr) {
dbfm/dbfm_file.inc:function dbfm_delete_recur($source, &$ret, &$err_arr) {
dbfm/dbfm_file.inc:function dbfm_move($source_rec, $dest_rec, &$err_arr) {
dbfm/dbfm.module: function dbfm_build_dir_list($fid = '', $path = '', &$err) {
dbfm/dbfm.module:function dbfm_dbupdate_file($fid, &$err_arr, $metadata = array()) {

This should resolve these errors.

Also, obviously, if you want to catch this error, make sure you haven't set allow_call_time_pass_reference to true in your INI file.

A big thanks for spotting the errors. I've had to change the error reporting - I'd never provided for reporting multiple errors in the javascript so having an error array never actually worked properly. I've now just used an error string everywhere. And this time the ampersands ONLY go in the function declarations (kinda rushed coding the first time around and I slipped up a few times). The first of the 'replication' releases is currently being tested and should be out within the next few days - this fixes the errors. Then I'll be starting on a proper search facility.