0x8056530b error enabling disk deduplication on Windows Server 2012 R2 Volume - any ideas why or how to fix?

I'm getting the following error when trying to enable disk de-duplication on a volume on my Windows 2012 R2 file server.  The error is:

"There was an error updating Data Deduplication on volume: MSFT_DedupVolume.Volume='\\?\Volume{8dfc4322-9997-11e3-93f5-005056a84b9b}\' - HRESULT 0x8056530b, The specified volume type is not supported. Deduplication is supported on fixed, write-enabled NTFS data volumes and CSV backed by NTFS data volumes."

The volume in question is a 1TB VMFS volume mounted to the virtual machine that is the Windows file server.  I could find no info anywhere that references this error as it relates to a standard mounted volume or VMware or VMFS. 

Any ideas on what could be the problem or how to fix it?  I could find nothing in the log files other than an entry which is basically a repeat of the error above.

Any help would be greatly appreciated.

- ADEHART