What is DME?

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DRY malt extract (as opposed to LME; LIQUID malt extract.)

Basically LME with all water removed.

-walker
 
It's also, on rare occasion, referred to as "spray" or "sprayed" extract, due to the fact it's made by spraying wort into a hot drying chamber.
 
Diastatic malt extract is a liquid malt extract which still retains some of the enzymes responsible for converting starch to sugars.

If you are doing an extract brew with crystal or chocolate malt (and some other grains which I can't remember off the top of my head) then regular malt extract will do for these brews as these malted grains already have their starch converted (?).

Extract brews which contain wheat, oats and certain types of malted barley need a diastatic malt extract and a partial mash process in order to create sugars.

I'm no expert (only one extract brew under my belt) so others may be able to give you a clearer answer.
 
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