janus-osx:dns rik$ ls
__init__.py	dns.py		setup.py
janus-osx:dns rik$ python setup.py develop --install-dir setup.py -m
running develop
Checking .pth file support in setup.py
error: can't create or remove files in install directory

The following error occurred while trying to add or remove files in the
installation directory:

    [Errno 20] Not a directory: 'setup.py/test-easy-install-6136.pth'

The installation directory you specified (via --install-dir, --prefix, or
the distutils default setting) was:

    setup.py

Perhaps your account does not have write access to this directory?  If the
installation directory is a system-owned directory, you may need to sign in
as the administrator or "root" account.  If you do not have administrative
access to this machine, you may wish to choose a different installation
directory, preferably one that is listed in your PYTHONPATH environment
variable.

For information on other options, you may wish to consult the
documentation at:

  http://peak.telecommunity.com/EasyInstall.html

Please make the appropriate changes for your system and try again.

janus-osx:dns rik$