Here is the code:
Sample input - this editor a

#!/usr/local/bin/perl

#This script will read a directory containing individual records, write
their
#data contents to a single output file for input to elink. This was
developed
#for the transactions from QUEST to Logician. Sept 2005 Holly Hawkins

#define the file directory paths

$datainpath = "C:\\YNHH_Files\\Quest\\Quest_IN";
$dataoutpath = "C:\\YNHH_Files\\Quest\\Quest_OUT";
$tempdir  = "C:\\YNHH_Files\\Quest\\temp";
$archivedir = "C:\\YNHH_Files\\Quest\\archive";

#open the directory that has the input files

opendir THISDIR, "$datainpath" or die "Serious Error: $!";

#read the names of the individual files into an array "@allfiles"

@allfiles = grep !/^\.\.?$/, readdir THISDIR;

closedir THISDIR;
# the follwing line of code was entered by REV to prevent this script
# from running if the dummyrec is the only file existent in the
directory.
if (@allfiles <= 1) {exit}

#print "size of array: " . @allfiles . ".\n";

#writes the names from the directory to a file in tempdir

open RECORDNAMES, ">$tempdir\\recnames.txt"  or die "Serious Error:
$!";

foreach $allfiles (@allfiles) {
#               if ($allfiles != '99999dummyrec.txt')
                {print RECORDNAMES "$allfiles\n"};
#        print "$allfiles\n";
                }

#fileout has the names of the records to be deleted
close "$tempdir\\recnames.txt";

# now take the record names in RECORDNAMES,
#and write the contents of the each of the records to another file.

#open dataout.txt for the data from the records
#the >> will open the file if it does not exist, or append to it
#if it is there already

#reopen filenames file as input

open (RECORDNAMES, "$tempdir\\recnames.txt")  or die "Serious Error:
$!";
open (OUTFILE, ">>$dataoutpath\\questout.txt") or die "cannot open
questout.txt.\n";

#write to the dataout.txt file

select (OUTFILE);

# Read the file of record names
# open each file
#write contents of file to the dataout.txt OUTFILE

#=>>>>This is the problem  - each segment is now read as a separate
record, and written out #=>>>separtley - I want to read the file in one
'chunk".

while (<RECORDNAMES>)  {
 $filename = "$datainpath\\$_";
  open (X, "$filename");
  while (<X>)

   #  {if ($filename != "$datainpath\\99999dummyrec.txt")
      {print  "\x0B$_\x1C\x0D"};

perldoc -q entire
Found in /opt2/Perl5_8_4/lib/perl5/5.8.4/pod/perlfaq5.pod
     How can I read in an entire file all at once?

   perldoc perlvar

You should use single quotes unless you _want_ one of the two extra
things that double quotes give you.

You can use sensibly-leaning slashes in filenames that are not
going to be fed to the M$ "shell".

   $data_in_path = 'C:/YNHH_Files/Quest/Quest_IN';

Quoting a lone variable. Bad.

See:

   perldoc -q vars

       What’s wrong with always quoting "$vars"?

   @allfiles = grep $_ ne '.' and $_ ne '..', readdir THISDIR;
or
   @allfiles = grep /^[.]{1,2}$/, readdir THISDIR;

You should choose a more meaningful filehandle name too.