If you assign an instance of Category that is present in the CategorySource of RadScheduleView - it should be applied as expected. If you are creating new instance - make sure the Name matches a category in the CategorySource of RadSchedule. For example this will match the default red category of the control:
var category =
Hope this helps. If you still face issues - I would like to ask you to share a sample project that demonstrates the drag drop implementation (with local source), so we can check it on our side and provide you with a solution.
Telerik by Progress
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