dvips is not the
driver for converting .dvi to Postscript, for example, if
you are using Textures, OzTeX or CMacTeX on a MacOS system or PCTeX on
a DOS or Windows system, then you are not going to be able to use
the epsf package to include Postscript graphics.
On clam we also have epsfig, which you can use with
some options not available in epsf.