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Setup Data Source Connection for Report Builder 3.0 to MS SQL 2012 Adventureworks 2012 database

I am trying to determine the correct setup for establishing a connection to my local copy of AdventureWorks database.  See the attached for data source I believe I need, however, I am unable to establish a connection.  Please help with what goes where in the connection Dialog box for the Report builder.  When I attempt to setup the connections properties to the MSSQL11.KAREN, I am unable to get list of database names in the drop down

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thanks that did the trick.