The argument dkx determines some additional structure of the matrices of the state-space model to be estimated. This will give a so called output error model. Note that the initial state is something that relates to the particular data set for which the model was estimated, and may not be relevant when the model is evaluated on a new set of data. Letting the last input argument be 'trace', gives information to the command line about the choice of auxiliary order, in case this is given as a vector. Automatica , Vol.
Examples Build a fifth order model from data with three inputs and two outputs.
Try several choices of auxiliary orders. Look at the frequency response of the model.