When you say "engage the clutch", do you meen "pull in the clutch lever"? That's what it sounds like. (Note:The clutch is disengaged when the lever is pulled,and engaged when it's not.) If that's the case, there could be a few different problems. Is the clutch cable adjusted properly? If the adjustment is all the way out, and the lever still has excesive "play" in it, you need a new cable. If the cable is ok, you need to remove the clutch cover and inspect the clutch components. Is the basket groved? Are the plates within spec.? Is the push rod damaged? Just go through it and see what you can find.
If you are totaly lost after reading the above, get a manual and read it. Then read it again.
That should be enough info to get you on the right track, hope it helps, YZ165