If you created categories, why do you also need a DL?
Just send a message to all the Contacts in your Category.
Select the Category > Actions > New Message to Contact.

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Russ Valentine
[MVP-Outlook]
> Distribution list has to be created either directly from list of mail
> addresses or distribution list fom email message.
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> I am not able to use the category field for creation of distribution list
> for group emailing purpose