We have two Windows Server and both are in Workgroup.
DC2003 is Windows Server 2003 x86 and WIN2KR2 is Windows Server 2008 R2.
We need migrate local users and groups from Windows Server 2003 (source server) to Windows Server 2008 R2 (destination server) and we will using Windows Server Migration Tools feature.

Here is my local users and groups on WIN2K8R2 server, before doing anything.





Here is my local users and groups on DC2003 server, before doing anything.





On Windows Server 2008 R2 (destination server), click Server Manager, right click on Features, select Add Features, on Select Features page, select Windows Server Migration Tools, then click Install.



After installation is finished, click Start, select Administrative Tools and you can see Windows Server Migration Tool folder.



Now, need create deployment folders for source server by running the Smigdeploy.exe tool. Right click on Command Promp and click Run as administrator. change to the directory in which the smigdeploy.exe tool is stored. Run following command first:

cd %Windir%\System32\ServerMigrationTools\

Because my source server OS is Windows Server 2003 x86, command format is:

SmigDeploy.exe /package /architecture X86 /os WS03 /path <deployment folder path>

My share folder path is \\DC2003\Migration$, I run following command:

SmigDeploy.exe /package /architecture X86 /os WS03 /path \\DC2003\Migration$



Now, we need register Windows Server Migration Tools on source server.
On Windows Server 2003 (source server), Click Start, click Run, type cmd, and then click OK. Change to the directory to which you copied the Windows Server Migration Tools deployment folder. In my case, I run following command first:

cd Migration\SMT_ws03_x86

then run following command to register Windows Server Migration Tools cmdlets:

.\Smigdeploy.exe



When registration is finished, a message is displayed that indicates that the registration finished successfully, and a Windows PowerShell session opens. You can click Start, select Administrative Tools and you can see Windows Server Migration Tool folder. Click Windows Server Migration Tools and run it.



We use Export-SmigServerSetting command on source server to migrate local users and groups. When we need migrate all, command format is:

Export-SmigServerSetting -User All -Group -Path <MigrationStorePath> -Verbose

My share folder path is \\DC2003\Migration$\2003, I run following command:

Export-SmigServerSetting -User All -Group -Path \\DC2003\Migration$\2003 -Verbose

Now, you are prompted to provide a password to encrypt the migration store. Write passwordt and press Enter.







As you see, created file name is svrmig.mig.



On Windows Server 2008 R2 (destination server), click Start, select Administrative Tools, select Windows Server Migration Tools folder, right click on Windows Server Migration Tools and click Run as administrator.



We use Import-SmigServerSetting command on destination server to import local users and groups. When we need import just Enabled users, command format is:

Import-SmigServerSetting -User Enabled -Group -Path <MigrationStorePath> -Verbose

My share folder path is \\DC2003\Migration$\2003, I run following command:

Import-SmigServerSetting -User Enabled -Group -Path \\DC2003\Migration$\2003 -Verbose

Now, you are prompted to enter a password (that is password in export step). Write passwordt and press Enter.





You can see, if user or group account already exists in server, the account does not migrate.



Now, we check migrated accounts.
Keep in mind, the migrated local user accounts will be disabled (Account is disabled) and have their properties set to (User must change password at next logon).







Source:
Install, Use, and Remove Windows Server Migration Tools

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