Diamond-like carbon coatings (DLC) are of interest as wear-resistant coatings. Mechanical milling of the substrate material, which promotes film adhesion, typically produces a parallel array of milling tracks on the substrate surface. Residual stresses from the deposition process in conjunction with thermal expansion mismatch result in compressive stresses in the film that can exceed 1 GPa. Failure of these coatings frequently begins with a delamination at the film-substrate interface directly above a convex undulation as a result of the large compressive stresses in the film. Milling tracks are unidirectional and approximately semi-cylindrical. The delamination crack spreads over the cirfumference of the wear track and then tunnels along its length. This cracking sequence finally leads to partial spallation of the coating which greatly reduces the overall wear life of the component. Buckling dominates the cracking behavior if the delamination crack is larger than about ten film thicknesses. The solution for such long cracks is well developed. However, the width of a typical wear track in a DLC coating system is on the order of the film thickness. In this paper a solution for circumferential tunnel cracks whose width is comparable to the film thickness is presented and used to investigate the failure of DLC wear-resistant coatings.