Recently, high data rate communication system like long term evolution(LTE), ultra mobile broadband (UMB) and Wimax has gained popularity. But this high data rate communication is possible if the wireless system exhibits full rank MIMO channel.However, full rank MIMO channel is not possible if the channel is highly correlated and keyhole affected. In recent years, researchers have developed a new paradigm called cooperative communication in order to get rid of the limitations of MIMO techniques. In this paper, we have analyzed the performance of DF relay with keyhole and correlation effects in MIMO relay channel. Moreover, based on MGF approach we determine the closed form expression of average SER of the MIMO DF system. Based on our analysis, it is evident that cooperative scheme outperforms the keyhole affected non cooperative scheme.