DB2 9.5 - Shrink Tablespace
I ended up figuring this one out.

Shrink a tablespace with DB2 9.5 is much more difficult.
The reduce and resize command exist but will only work if the high water mark is low.
You cannot use reduce or resize below the HWM size.

You need to use DB2DART -LHWM and have the database deactivated while doing so.