A DDE conversation takes place between two applications. The client application initiates a data exchange by requesting data from a server application. The server responds by sending the requested data to the client application. A server can provide data to many clients, but a client can make requests of only one server. An application can create many DDE clients in order to exchange data with one or more DDE servers. An application can be both a client and a server at the same time. As in all client/server architectures, the client application always initiates the DDE conversation.

The VA Smalltalk implementation of DDE introduces DDE server and DDE client objects. DDE servers can supply many DDE clients, but a DDE client can request from only one server. An application written in VA Smalltalk can have as many DDE servers and clients as needed.

Previously, users have employed the clipboard for exchanging data between different applications. This required the user to select the data, copy it to the clipboard (usually by selecting a menu option), activate the second application, and then paste the data into that application (again, usually by selecting a menu option). This process is wholly dependent on the user, not only for copying the data, but also for updating the data. DDE provides a mechanism for the complete automation of this process. A DDE server application, for example, can be made to send client data automatically without any user intervention.

There are many uses for this type of data exchange. A stock portfolio manager is one example. Here a DDE stock server application might be created that, as part of its initialization, would dial up a stock pricing service over a modem. It would then collect data from the pricing service and make it available to any connected DDE clients.

Upon startup, a DDE client application would make a request to connect to the DDE stock server. The stock server would acknowledge that request and establish a DDE conversation. The client application could then request continuous updates on a specified, named piece of data (in this case the name of the stock). When the data changed, the stock server application would automatically send a notification to the client application. Then the DDE client application could recalculate its entire portfolio and present its user with new or updated information.