You are using single quotes in you open statements. try

open INFILE2,'<', $localfile ...
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and you should have better luck. You also need 2 backslashes in a double quoted string. Or use $directory . '\' . $name.

use strict;
use warnings;
use Cwd;

my $startdirectory = cwd;
print "Starting directory:  $startdirectory\n";
use File::Find;
  find ( \&inFiles, ('.') );
exit;

sub inFiles {
chomp;
my $name = $_;

my $directory = cwd;


if ( $name =~ /.dat/) {
  print "dir = $directory\tname = $name\n";
  
  open INFILE,'<', "$directory/$name"  || warn ("Cannot open input fil
+e $name\n");
  my @infilecontent = <INFILE>;
  print length @infilecontent;

  my $localfile = "$directory\\$name";  #win32 
  open INFILE2,'<', $localfile  || warn ("Cannot open input file $loca
+lfile\n");
  @infilecontent = <INFILE2>;
  print @infilecontent;
 } 

} #inFiles
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