Posted in another thread, thought I'd share here. I used a Foxwell NT530 to "Initialize" the transfer case. I couldnt find a "reset", I figured this is the closest thing avail.
Main Menu -> BMW
Select A Vehicle -> BMW
SmartVIN -> follow prompts/select your car
Main Groups -> Service
Service Function -> Drive
Drive -> Transfer Box Transmission Control Unit
Transfer Box Transmission Control Unit -> Repair
Transfer Box Transmission Control Unit -> [4] = Initialization Of Transfer Box Control Unit
Transfer Box Transmission Control Unit -> "calibration necessary - start engine" -> Start Engine -> OK
Transfer Box Transmission Control Unit -> WAIT
Transfer Box Transmission Control Unit -> "unitialization procedure completed" -> OK
Transfer Box Transmission Control Unit -> "end service function" -> OK
