I think there's a bug in the latest version which causes this not to work sometimes, but there's a fool-proof way to get it to work.
First, you need a server file, so create a text file called 'dedicated.cfg' and fill it with the following text (edit as you see fit):
#Tread Marks Dedicated Server config file.
#This must be set to 1.
DedicatedServer = 1
#Updates per second rate of the server. This should
#NOT be more than 10 for Internet Servers, unless
#you only want High Bandwiidth people playing. LAN
#servers can safely set the update rate up to 20.
#Note that this doesn't affect the FPS of the clients,
#only the rate that network update packets are sent.
DedicatedFPS = 10
#How many players can join (doesn't count Bots).
MaxClients = 16
#Time between Heartbeats to Masters, in seconds.
SendHeartbeats = 18
#Addresses of Master Servers to send Heartbeats to.
#There are no error messages if the Master addresses
#are wrong, so PLEASE check www.TreadMarks.com for
#the latest address to use. Note that this is
#only required for Internet servers to be visible
#to everyone, LAN servers don't need to send heartbeats.
MasterServer0 = 18.104.22.168
#Please fill these in with your info!
ServerName = "Temp Server"
ServerInfo = "Dedicated, two teams. Requires latest patch from www.treadmarks.com."
ServerWebSite = "http://www.treadmarks.com/"
#Max bytes per second sent to each client.
#Reduce this number if you are going to be running a server on a connection with small upstream bandwidth, like a DSL
ServerRate = 10000
#Time Limit in Minutes.
TimeLimit = 30
FragLimit = 40
#Game mode, 1 for Deathmatch/CTF, 0 for Race.
Deathmatch = 1
#When running a Race server, as soon as the first human player
#crosses the finish line the CoolDownTime will start, during
#which time weapon fire isn't allowed, but the rest of the players
#will be able to finish the race and place if they can cross the
#finish line before the CoolDownTime is up. Since the race is
#only fair to players who are in at the start of the race,
#you should set the Laps to 1, and the StartDelay to at least 60,
#so that if a player joins in the middle of a race, they won't
#have to wait too long to start a new race with everyone else.
#Number of seconds to count down before the race or match starts.
#Set this to at least 60 for Race servers.
StartDelay = 30
#Seconds to show scores before switching levels. Should be at least 10.
#Set this to 60 or 120 for Race servers.
CoolDownTime = 15
#Number of laps in a Race mode game.
Laps = 1
#List of maps to run on the dedicated server, specify by file
#name or descriptive name. Specify no maps to run all maps.
#To run a CTF server, specify only CTF Maps and make sure Deathmatch = 1
#DediMap0 = "The Ramp"
#DediMap1 = "Scarab"
#Set to 1 for random maps, 0 for cycling maps.
RandomMaps = 1
#Port addresses. For firewalls or proxy servers, it's best to
#allow access on all ports from 12300 through 12499.
ServerPort = 12300
ClientPort = 12350
MasterPort = 12499
LogFileActive = 0
LogFileName = "dedicated.log"
#Number of AI bot tanks.
NumTanks = 6
#When enabled, the game will add/remove AIs when players join and leave to keep the tank count equal to NumTanks
AIAutoFill = 1
#The skill level of the bots, between 0.0 and 1.0.
AISkill = 0.6
#The types of tanks allowed for bots, 0 is all, 1 is Steel, 2 is Liquid.
LimitTankTypes = 0
#Set this to 1 to enable people to join teams. If 0, no teams are allowed.
TeamPlay = 1
#Set this to 1 to use Team Scoring instead of individual scoring, if team play is on.
TeamScores = 1
#Set this to 1 to allow team members to kill each other (but it won't give frags).
TeamDamage = 0
#The number of teams allowed on this server. Individual maps can be set to less than this value, and will override this
value if lower
MaxAllowedTeams = 2
#Set this parameter (uncomment) if you want the AI tanks to be on a specific team only.
#Otherwise they will spread out evenly among all player teams.
#AITankTeam = Red
Now, press Windows+R on your keyboard to open the "Run..." dialog and type in something like the following:
"C:\Program Files\LDA Games\Tread Marks\tm.exe" "C:\Program Files\LDA Games\Tread Marks\dedicated.cfg"
There's two parameters there, the first is the location of your Tread Marks executable (remember to change "Program Files" to "Program Files (x86) if you're running a 64-bit version of Windows) and the second parameter is the location of your dedicated.cfg file. The quotation marks are important, because otherwise the spaces will confuse Windows.
If you do this, it should definitely work. Once you've got it the way you like it, you can create a Windows shortcut to you don't need to type out those paths each time.