.dll's

[MoNksBaNe_Agahnim]

What exactly are dll files, such as what do they contain and are used for?

[iago]

They contain functions that can be called from various programs.  They tend to be distributed with .h files, which allow you to use them.

That's about all I know.

[Zakath]

They declare functions as exports. By linking with a completed DLL, provided you know the functions' names, you can declare and use them as if they were defined in one of your source files.

[Adron]

dll: Dynamic Link Library

dll's and exe's are very similar: They use the same format and both can export and import functions.

Their use however is generally different: A dll is typically loaded into a number of processes - a way of sharing code. Each instance of the dll will in win32 have its own copy of any static/global variables, but all instances will share the code, if it hasn't been moved in memory.

dll files and lib files somewhat fill the same purpose. They both contain functions for you to use, like Zakath and iago said. With a lib file, the functions are copied into your exe at link time. With a dll file, an import table is written into your exe file and the functions are loaded from the dll at the time your exe is executed.