To calculate rating for domains we assess links between them.
If Domain A has at least one page with a dofollow link to a page on Domain B - we remember the fact that Domain B has a link from Domain A.
There are a few simple rules to consider while calculating:
1) the higher rating a domain has, the more of this rating is transferred to linked domains (as defined above);
2) all linked domains receive equal amount of rating from the source domain, ie. low-rated domain with small number of linked domains can influence your DR more than super-popular domain (which links to million domains).
Repeating the calculation process for dozens of times, we get a rating for each domain. And the final Domain Rating value is obtained by scaling computed absolute value into range 0..100.