I saw that error and did what you just explained. The backup is on the same machine so I created my sql command the following way.

EXEC sp_addumpdevice 'disk', 'dmprod','D:\VMDB2012$DM_DMPROD_FULL_20170830_020006.bak';

I than ran the restore again and I received the exact same error.

So I wanted to check if my backup device did exists so I ran the command again and received the following error.\

Msg 15026, Level 16, State 1, Procedure sp_addumpdevice, Line 85
Logical device 'dmprod' already exists.