A DLL, or Dynamic Link Library, is a file format used in Microsoft Windows operating systems that contains code and data that multiple programs can use simultaneously. This allows for efficient memory usage and helps reduce the size of applications, as common functions can be stored in a single location rather than duplicated in each program. When a program needs to perform a specific task, it can call upon a DLL to execute that function. This modular approach not only streamlines software development but also makes it easier to update and maintain applications, as changes to a DLL can benefit all programs that rely on it.