My mouse works under Windows 95, and in DOS boxes running under Windows 95, but not when I boot to DOS or "Restart the computer in MS-DOS mode"

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My mouse works under Windows 95, and in DOS boxes running under Windows 95, but not when I boot to DOS or "Restart the computer in MS-DOS mode"

Explanation:
You are running Windows 95 and the mouse works properly within the graphical interface (regular Windows 95). DOS programs have mouse support when run within Windows 95 (in a DOS box or window). However, when you restart the computer into DOS mode, or boot straight to DOS without starting Windows 95, your DOS applications have no mouse support.
Diagnosis:
You do not have a DOS-based mouse driver loaded, and you need one. Windows 95 has native mouse drivers which function when the graphical user interface is running. The mouse driver loads when you start Windows 95 and supports both Windows applications and also DOS applications that run within Windows. However, when you "Restart the computer in MS-DOS mode", you are merely shutting down Windows 95 and staying in the DOS 7 environment that underlies it. This unloads the Windows 95 mouse driver, so you won't be able to access the mouse unless you load a DOS mouse driver when you shut down (or don't start) "true" Windows 95.
Recommendation:

The best way to avoid this problem is to simply load a DOS mouse driver in your AUTOEXEC.BAT program. You should follow the instructions that come with your mouse to install the mouse driver. The mouse driver will be loaded when the PC boots up and will therefore always be available, whether the graphical interface of Windows 95 is active or not. The only real disadvantage of this solution is that a small amount of either conventional memory or the upper memory area is used up by the mouse driver. The native Windows 95 driver runs in extended memory (which is much more plentiful and not a scarce resource like conventional/upper memory).
Place the line to invoke the DOS mouse driver into the DOSSTART.BAT file within your Windows directory (usually C:\WINDOWS). This batch file is executed automatically each time you exit to DOS from Windows ("Restart...") The advantage here is that no conventional memory is used for the driver unless it is actually needed. The disadvantage is that booting directly to DOS without ever entering Windows at all will cause the driver not to be loaded (you can still load it manually as described just below).
You can simply run the mouse driver as needed; install the mouse driver and take a look to see what the install program sticks into the AUTOEXEC.BAT file. Then copy it to a separate file, maybe called DOSMOUSE.BAT, and place into a directory that is in your search path (set by the PATH statement in AUTOEXEC.BAT). Run the file whenever DOS mouse support is necessary.

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