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I have had this car for a little over a month with no issues out of it. last night I was unable to use the key fob to unlock the car/disable the alarm. I attempted to unlock the door with the key and it set the alarm off. I replaced the batteries in the fob and it still would not work. i am at a loss.
 

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The 1995 model year had a couple different alarm systems, and the 540i had a system different from the sixes. Do you know the build date of your car (including month)? It's on a label on the driver's door jamb.

IIRC, the wiring to the trunk lock actuator can break at the trunk hinge due to years of flexing, which can do wonky things. Try unlocking the car at the trunk and see what happens. Wiring at the door can also break, but it seems like wiring fatigue at the trunk is more common on E34s.

Here's a pretty helpful thread on the DWA alarm system used in the 540i. Maybe it'll help you. https://www.bimmerforums.com/forum/showthread.php?1100494-DWA-Alarm-System-(94-95-Owners-Help)
 
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