While flying a non-precision back course approach; a C525 Citation Pilot received a Low Altitude Alert and an EGPWS 'Terrain' warning when he misread the altitude at the first step down fix and instead descended to the lower altitude published for a subsequent fix.

Narrative

On the Back Course approach to Runway 3 at LUK I received a Low Altitude Alert from Tower and an EGPWS terrain alert. Performed a Missed Approach. I had inadvertently descended below the MDA because I read the DME incorrectly. There are 2 step down fixes on the approach; one is at 9.6 and the other is at 4.6. I misread the 9.6 for a 4.6. A contributing factor was that I had a slight head cold which worsened during the flight.LOC based back course approaches cannot be flown utilizing FMS construction which prevents the use of VNAV coupled vertical descents. They require basically 'dive and drive' measures from the pilot. If they provided any other type of non-precision approach (GPS; NDB; etc.) to Runway 3; NAV/VNAV coupling would be possible and glide paths could be displayed and captured. Localizer type approaches without GS are thus more difficult and it seems manufacturers may have some type of regulation which prevents them from allowing pilots to couple vertical modes. This is unfortunate as the pilot must compute required descent rates when the FMS is fully capable and could be flown with VNAV.