sp_dboption is not available in SQL Server 2012

sp_dboption was deprecated a while ago - http://msdn.microsoft.com/en-us/library/ms187310(v=sql.105).aspx

The recommended alternative is ALTER DATABASE - http://msdn.microsoft.com/en-us/library/ms174269.aspx

This is probably extremely terrible advice but I'll post it anyways: I needed to create a SharePoint 2003 (WSS 2.0) site and I am using SQL Server 2014 for my DB Server. I could not create a site collection. I copied the contents of the sys.sp_dboption stored procedure and created it in my master database on SQL Server 2014 (in the dbo namespace) and SharePoint works now.

So yeah, that can be an option if you're stuck...