Digital Negative (DNG) is an openly published raw file specification that stores the “raw” pixel data captured by the digital camera sensor before it has been converted to JPEG or TIFF along with standard EXIF metadata, date, time, camera used, and camera settings. This format is freely available for other software and hardware vendors to support. 

What is the Adobe (DNG) Converter?
The Adobe DNG Converter enables you to easily convert camera-specific raw files from the supported cameras listed below to a more universal DNG raw file.

What is a "raw" file?
A raw file contains the “raw” data captured by the digital camera sensor before it has been converted to JPEG or TIFF. Cameras that create JPEG or TIFF files process (and in the case of JPEG files, compress) the sensor data.When working with raw files, the file is not compressed or processed in the camera-
instead, our software gives the user complete control over the conversion settings. For example, white balance is not applied to the raw file but is stored with the file so the software can default to the originally intended setting. Other information contained in a DNG file includes standard EXIF metadata (just like in JPEG files), date, time, camera used, and camera settings.

Benefits of raw files
Some of the benefits of shooting raw include:
Smaller files than uncompressed TIFF
Does not have the artifacts of compressed JPEGs
Many key camera parameters, such as white balance, can be modified even after the image is captured
You have complete control over conversion settings rather than letting the camera decide
Access to 16-bit data for greater detail and fidelity
Flexibility of converting a single file using multiple conversion settings

Home Page -  http://www.adobe.com