What is DMorph? 
DMorph is used to play back an object sequence.  Object sequences are created using SaveMorph, which is one of the selections on the Customize tab.   DMorph doesn't actually play back by loading the objects and displaying them, what it does is use the object sequence as a displacement (morph) for the base object (the object that you applied DMorph to).

Why is DMorph? 
There are several reasons for using DMorph, but perhaps a good example would be to use it with Soft Body Dynamics.  Lets say you have a flag blowing in the wind and it's just the way you want it.  You would use SaveMorph to record its animation into individual objects--one object per frame-- and then use DMorph to play back the sequence.  That way you don't have to use CPU power to drive the Soft Body Deformation.  It will then also allow you to render the animation with motion blur or over a network.   For more information about Soft Body Dynamics click here.

Another good use for DMorph is for making crowds.  Just animate a few characters, then SaveMorph their animation, then use DMorph to make them into a huge crowd without slowing down the playback speed as much as real characters would.  It also makes it easier to position them since there are no IK goals to worry about anymore.

Anything else I should know?
1) If you save a messiah Project File (mpj), the object sequence will not save with it.  The reason is that the Project File only saves what is actually loaded into messiah, but object sequences are referenced, they are not actually loaded in.  So if you send someone a Project File and are using DMorph, zip up the object sequence and send that too.  They might then have to re-load the sequence in Setup, but that's quick, easy and painless.

2) Look both ways before crossing the street.