Dermal papillae are small, finger-like projections located at the upper layer of the dermis, just beneath the epidermis. They play a crucial role in enhancing the surface area for the exchange of nutrients and waste between the dermis and epidermis. This structure also contains capillaries and nerve endings, contributing to the skin's ability to sense touch and pressure. These projections are particularly prominent in areas of the skin that experience friction, such as the fingertips and soles of the feet. The unique patterns formed by dermal papillae are responsible for fingerprints, which can be used for identification purposes.