I found this hopefully it helps.
B2725 - Active Transfer Case Mode Switch Malfunction
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Schematic
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Circuit Description
The range/mode switch circuit consists of four normally open switches. The transfer case shift control module supplies a regulated 8 volts, DC to the switch through the 8 V Reg circuit. The current travel through a 9.09 K Ohm resistor located inside the switch. Then returns current to the transfer case shift control module through the switch signal circuit.
The transfer case shift control module constantly monitors this signal voltage to determine the condition of the mode switch circuit. If no buttons are pressed, and the transfer case shift control module detects a voltage level outside the possible range (approximately -0.5 to 1.0 volts) for longer than 5 minutes, the transfer case shift control module will set this DTC or if a button is held down or sticks for a period longer than 5 minutes.
When each of the switches is depressed they will complete a circuit through their own specific resistor. The transfer case shift control module continuously monitors the switch input to determine whether the 4HI, AUTO 4WD, 2HI, and 4LO button selections are made by the driver. Neutral may be obtained if the following conditions are met:
* The engine is running.
* The automatic transmission is in neutral (or the clutch pedal is depressed on a manual transmission application).
* The vehicle speed is below 3 MPH.
* The transfer case is in the 2HI mode.
Once these conditions have been met, pressing and holding both the 2HI and 4LO buttons for 10 seconds will shift the transfer case into neutral, turning on the red neutral indicator lamp.
Conditions for Setting the DTC
* The system constantly monitors the voltage on the switch signal circuit.
* If the system detects a voltage level outside the possible range produced when no buttons are depressed, (approximately -0.5 to 1.0 volts) , the DTC is logged.
Action Taken When the DTC Sets
* All shifting will be disabled.
* The SERVICE indicator (4WD/AWD) lamp will be latched on for the remainder of the current ignition cycle.
Conditions for Clearing the DTC
* The transfer case shift control module will clear the current DTC if the condition for setting the DTC no longer exists.
* A history DTC will clear after 100 consecutive ignition cycles without a fault present.
* History DTCs can be cleared using a scan tool.
http://www.gmtruckhq.com/images/dtc/B2725/B2725_DC1of2.gif
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Test Description
The number(s) below refer to the step number(s) on the diagnostic table.
2. Tests for proper operation of the transfer case mode select switch.
3. Tests for proper voltage supply to the transfer case mode select switch.
4. Tests the transfer case mode select switch for proper resistance values in all switch states.
5. Tests the switch signal circuit for a short to voltage.
6. Tests the switch signal circuit for an open or a short to ground.
7. Tests the switch signal circuit for a short to the 8 V Reg. circuit.
8. Determines whether the 8 V Reg. circuit is greater than or less than the specified voltage.
9. Tests the 8 V Reg. circuit for a short to voltage.
10. Tests the 8 V Reg. circuit for a short to ground.
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