DPM 2007 works by leveraging both the OS VSS writers and the VSS writers included with Exchange 2007 and 2003 , SQL Server 2005 and 2000 , SharePoint 2007, and Virtual Server 2005 R2 S1, which capture application-specific information and ensure data consistency.
DPM 2007 then uses block-level filters (not file-system filters) to look for changed blocks marked for storage for bit-masked protected data. These changed blocks are sent to DPM 2007 at the configured interval (this process is known as express full backup).
In addition, SQL Server and Exchange transaction logs are also sent to DPM, which can be used for more frequent restoration purposes.
For a great presentation on how DPM 2007 works with VSS, see "How DPM 2007 protects data."