As the solution has separated the database concerns from the start-up project.
Hence the dotnet ef migrations commands need explicitly specified reference to the start-up project (--startup-project) and the project with the DB context and entities (--project).
See the official docs for the supported command arguments.
dotnet ef migrations add InititalCreate --project Database/Database.csproj --startup-project Api/Api.csproj --context DataContext -vIt adds Migrations folder that might require adding some EF Core NuGet packages to Database project.
The following command creates an SQL script that can be used for creating a new DB and updating an existing one.
dotnet ef migrations script -i -o CreateOrMigrateDatabase.sql --project Database/Database.csproj --startup-project Api/Api.csproj --context DataContext -v