The request to add a new NTDS Settings object was denied because the highest functional level supported by the operating ...

The request to add a new NTDS Settings object was denied because the highest functional level supported by the operating system was lower than the functional level of the domain or forest.  
  
Highest functional level of the operating system:
%1  
Domain or forest functional level:
%2  
  
User Action  
Install the correct operating system.
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