Can I use Windows 8.1 in a VM environment ?

No the Windows 8.1 OEM Product Key is embedded in the UEFI BIOS and the OEM license cannot be transferred to newer hardware. A VM - virtualised machine is classified as a new machine with virtualised hardware. Its classified as a new PC by Microsoft even the host hardware is the same.

No the Windows 8.1 OEM Product Key is embedded in the UEFI BIOS and the OEM license cannot be transferred to newer hardware

As you can see from my original post, this is the same hardware, same laptop. No mention of new hardware.

A VM - virtualised machine is classified as a new machine with virtualised hardware. Its classified as a new PC by Microsoft even the host hardware is the same.

Please supply a valid document from Microsoft stating the above.

Also, In Jan 2015 - "Dell support have informed me that OEM, FULL and RETAIL are the same product. "  (Reference - en.community.dell.com/.../20713569

This is from Microsoft's website:

Q. Can I install OEM software on a virtual machine (VMware)?
A. You can install OEM software in a virtual environment as long as you have a separate license for each instance of the software. It is fine to use the OEM version as long as it is properly licensed. To be clear, a separate version of the software must be installed for both the “standard” and “virtual” installations.

https://www.microsoft.com/OEM/en/Pages/support-faq.aspx

As there would only be one version of Windows 8.1 running, then there is only a requirement for one liscense.

Hello.  It looks like you answered your own question with the FAQ from Microsoft as you are installing it on top of Linux you are technically using only one instance of the OS and only need one license.  As for OEM, Full, Retail products they are the same underlying product but they are supported differently.  OEM licenses are only supported by the OEM that supplies them, in this case Dell.  Retail is supported by Microsoft and full I'm not sure.  The software is the same but the support chain is different.  

Please supply a valid document from Microsoft stating the above. Also, In Jan 2015 - "Dell support have informed me that OEM, FULL and RETAIL are the same product. "  (Reference - en.community.dell.com/.../20713569

No-one in that thread worked for Dell. I answered most of your questions in that thread. OEM and Retail are equivalent when they are installed on the same machine. i.e. there is no restrictions when they are directly installed on your Dell Laptop.

The support mechanisms and ability to transfer differ between the license types however.

OEM - Original Equipment Manufacturer software is designed to be preinstalled on a device by an OEM in your case Dell. Support for the Device and the software come from Dell and not from Microsoft. For this reason the OEM license is cheaper than the Retail License.

RETAIL UPGRADE ONLY vs RETAIL FULL. With Windows 10 TH2 the concept of "Upgrade Only" licenses essentially went out the Window... All Windows 7, Windows 8 and Windows 10 Keys act directly as Windows 10 keys and double installations are no longer required...

So now look at the link you provided "FAQs for OEM Resellers and System Builders". Note that it is not FAQs for End Users. Lets look in some more detail:

https://www.microsoft.com/OEM/en/Pages/support-faq.aspx 

If you are building a PC for your personal use or installing an additional operating system in a virtual machine, you will need to purchase Windows 8 software or a Microsoft retail version of Windows 8.1 software. Windows 8.1 system builder software does not permit personal use, and is intended only for preinstallation on customer systems that will be sold to end users.

OEM System Builder software should not be bought directly by the end user. It is essentially a middleman license. System Builder "A" builds the computer and preinstalls Windows on it and then sells it to user "B". System Builder "A" supports user "B".

The license agreement FAQs are mainly for smaller minor OEM System Builders...

For major System Builders such as Dell things are again different the OEM key is actually embedded in the hardware within the UEFI BIOS. It is hence tied to the motherboard - because its embedded and hidden it can't be transferred. This is deliberately done as Dell will only support Dell hardware.

Unfortunately Microsoft never make any distinction between minor OEMs and major OEMs in these FAQs - probably because they assume larger OEMs know what they are doing and hence don't need public FAQs and secondly that only minor OEMs and not End Users won't be reading these FAQs.

Is OEM System Builder Software Transferable?

Links back to the top which you just read. If you are building a PC for your personal use or installing an additional operating system in a virtual machine, you will need to purchase Windows 8 software or a Microsoft retail version of Windows 8.1 software. 

Or to here. You are required to support the license on that original PC, but you cannot support a license that has been moved from a PC that you manufactured to one that you did not. This is one of the key reasons why an OEM System Builder License can’t be transferred. ​​​​​​​​​​​​​​​​​​​​​The entire PC, however, may be transferred to another end user, along with the software license rights. When transferring the PC to the new end user.

Can I install Software on A Virtual Machine? Again note it is "FAQs for OEM Resellers and System Builders" not FAQs for End Users:

You can install OEM software in a virtual environment as long as you have a separate license for each instance of the software. It is fine to use the OEM version as long as it is properly licensed. To be clear, a separate version of the software must be installed for both the “standard” and “virtual” installations.

I would say this is vaguely worded... Together with the above points... I would conclude:

If for instance we assume I am minor system builder "A". I could make a system with a Windows 10 OEM Host OS and I could preinstall VMWare and then also preinstall Windows 10 OEM as a Virtual Machine for End User "B". This would require 2 separate licenses. Of course in other configurations I could preinstall Linux and Windows 10 OEM as a VM and this would only require 1 OEM license. Providing of course I sell the hardware on to the End User and don't use it for personal use.

• Dell the OEM in your case did not preinstall VMware and did not preinstall Windows in a virtual environment. 
• You cannot make new virtualised hardware and transfer your Windows 10 OEM license of your host machine to your virtual machine. 
• Moreover - as mentioned earlier your Windows 8.1 key is embedded in the UEFI BIOS of your motherboard. Any VM you try to create it the likes of VMware by definition will be virtualised hardware. Even if you extract this Product Key and input it into the VM you will likely get Product Activation Issues as you have Transferred the Key to new virtualised hardware.

awesome! have fun :-)

Interesting. Thanks for letting us know that Microsoft activated it for you...