What is a DLL?
DLL files are binary files that can contain executable code and resources like images, etc. Unlike applications, these cannot be directly executed, but an application will load them as and when they are required (or all at once during startup).
Are they important?
Most applications will load the DLL files they require at startup. If any of these are not found the system will not be able to start the process at all.
DLL files might require other DLL files
In the same way that an application requires a DLL file, a DLL file might be dependent on other DLL files itself. If one of these DLL files in the chain of dependency is not found, the application will not load. This is debugged easily using any dependency walker tools, like Dependency Walker.
There are so many of them in the system folders
Most of the system functionality is exposed to a user program in the form of DLL files as they are a standard form of sharing code / resources. Each functionality is kept separately in different DLL files so that only the required DLL files will be loaded and thus reduce the memory constraints on the system.
Installed applications also use DLL files
DLL files also becomes a form of separating functionalities physically as explained above. Good applications also try to not load the DLL files until they are absolutely required, which reduces the memory requirements. This too causes applications to ship with a lot of DLL files.
DLL Hell
However, at times system upgrades often breaks other programs when there is a version mismatch between the shared DLL files and the program that requires them. System checkpoints and DLL cache, etc. have been the initiatives from M$ to solve this problem. The .NET platform might not face this issue at all.
How do we know what's inside a DLL file?
You have to use an external tool like DUMPBIN or Dependency Walker which will not only show what publicly visible functions (known as exports) are contained inside the DLL files and also what other DLL files it requires and which exports from those DLL files this DLL file is dependent upon.
How do we create / use them?
Refer the programming documentation from your vendor. For C++, refer to LoadLibrary in MSDN.credit
