Welcome To BYCWhat is DE?
I am having the same problem with on of my checkens
The quote you are quoting is from 2008 and the OP has not been active for almost 2 years.
"DE" is Dematiaceous Earth and if you are looking for a treatment for lice/mites, I would recommend that you find a Permethrin based poultry spray or dust to treat your flock. While DE may have a few "benefits" which most find controversial (you can google the debates), it is not an effective treatment for an active infestation.
Bare butts can also be from feather picking.
If you have photos you wish to share that would be good. Tell us about your hens, their ages, how they are housed, any issues they have, what treatments you have used and what you feed including treats.