Make two partions. On the first partition you should install 98. On the second partion 2k. You have to install 98 first or else the bootmenu and loader for win2k will be erased.
I made a third partition too to use it to install my programs and docs. My C: drive is 1GB containing win98 (only the OS) the D: drive (3GB) contains XP (only the OS). My E: drive (15GB) contains all my programs and mp3, docs etc.
Moving your existing OS to the D: drive with partition magic is not advised. The best way is to start with a empty disk then make 3 or 2 partitions. The first is the primary partition, the second is the extended partion.
After formatting and partitioning you have to install 98 first. After this you can install 2K on your E: drive (ext part.). The 2k installation takes care of the dualbootmenu.