DE is completely safe to use generously around the chickens. The only caveat is primarily for you. If you have asthma or COPD, be careful about breathing in the dust and perhaps wear a dust mask because the dry DE powder can make a cloud of silica dust that is not the best for breathing in, just like lime dust or cement dust.
Hopefully, you got USDA Food Grade DE. If not, then STOP! ONLY use FOOD GRADE DE. The variety used by pool supply companies for usage in pool filters contains some other chemicals and will poison your chickens.
So, if you have food grade DE, it is used both internally and externally to rid the birds for parasites. Mixing 5% DE into their food regularly keeps the birds free of all intestinal parasites and worms and also provides hen with an excellent source of calcium for strong egg shells.
Rubbing it well into their feathers down to the skin kills all external parasites such as fleas, ticks, and mites. The birds love to dust bathe in it. Make a dust box with DE and Play Sand mixed 50/50.
Dusting all of the nest boxes keep them free from fleas and mites and encourage hens to lay there rather than driving them off the nests because of the pests that love the bedding.
Sprinkling / dusting the rest of the coop and runs kill the parasitic pests and other like fire ants and slugs, but also kills fly maggots, and acts as a deodorizer, reducing chicken poo smells dramatically and reducing fly activity substantially. It also acts as a moisture absorbent to help keep things dry.
The bottom line is to use the FOOD GRADE DE almost everywhere since it is great for chickens both internally and externally. The great thing about it is that it contains no chemicals at all, only the silica shells of fossilized diatom algae.
By the way, you can use it in your garden to kill pests in the same manner as Sevin dust, just minus the chemicals. Just be careful about usage in areas where honeybees frequent because DE can kill honeybes as well. Outside, you have to reapply DE after heavy rains. Heavy rains can wash the DE off of the leaves of veggies that you sprinkle it on. It also works great sprinkled on fire ant hills!
Hope this helps.