Hi @Michael Brady,
You are correct, the username and password are stored in plain text and not encrypted.
The Atlassian logic is that if you already have access to that file you are probably an admin and you already have access to the DB.
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dbconfig.xml contains the information required to connect JIRA to a database - JDBC URL, connection settings, etc..
I'm not really sure what your question is. Would you provide some more details ?
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