Spectral Vector Error Diffusion, sVED, is an interesting approach to achieve spectral color reproduction, i.e. reproducing the spectral reflectance of an original, creating a reproduction that will match under any illumination. For each pixel in the spectral image, the colorant combination producing the spectrum closest to the target spectrum is selected, and the spectral error is diffused to surrounding pixels using an error distribution filter. However, since the colorant separation and halftoning is performed in a single step in sVED, compensation for dot gain cannot be made for each color channel independently, as in a conventional workflow where the colorant separation and halftoning is performed sequentially. In this study, we modify the sVED routine to compensate for the dot gain, applying the Yule-Nielsen n-factor to modify the target spectra, i.e. performing the computations in (1/n)-space. A global n-factor, optimal for each print resolution, reduces the spectral reproduction errors by approximately a factor of 4, while an n-factor that is individually optimized for each target spectrum reduces the spectral reproduction error to 7% of that for the unmodified prints. However, the improvements when using global n-values are still not sufficient for the method to be of any real use in practice, and to individually optimize the n-values for each target is not feasible in a real workflow. The results illustrate the necessity to properly account for the dot gain in the printing process, and that further developments is needed in order to make Spectral Vector Error Diffusion a realistic alternative for spectral color reproduction.