Haptic devices are special robotic devices that convey interaction forces from the virtual reality environment to the human operator. Since the human operator holds the device for interaction, ensuring the stability of these systems is very important. In this paper we present our work in analyzing and identifying the stability bounds of these haptics systems, namely the Z-width, specifically for multi-DOF (Degrees of Freedom) systems. Multi-DOF systems are usually modelled with complex dynamic equations. We utilized the features of SimMechanics and Simulink toolboxes of MATLAB for generating the dynamic model of these systems. In addition to the basic stick modelling feature in SimMechanics, CAD model of a real 2-DOF haptic device was imported to SimMechanics environment. A virtual wall interaction with the 2-DOF haptic device was modeled using the basic modules available in Simulink. The complete haptics environment including components like quantization of encoders, sampling rate of the controller, device friction, velocity estimation and filtering was realized for a realistic haptics force law simulation. The proposed implementation enabled us to study the effect of various components like virtual damping, encoder resolution, sampling rate etc. on the performance and stability of a haptics control loop.