I have never had luck with Diatomaceous Earth (DE) so I don't wast the money on it.
Diagnosis:
Lift the tail feathers and blow on the feathers around the vent area to expose the vent. You will see very little red mites scurrying around, and possibly a gray colored nest attached to the skin.
Treatment:
Sevin Dust
Ivomec
Deet, like deep woods off brand repellent.
To treat fowl for red mites, apply a small amount of Sevin Dust to the vent area, and under the wings. Make sure to retreat your birds 10 days after the initial treatment, and pick off any nests still attached to the vent area.
Along with treating the birds, you need to thoroughly clean there bedding and roosting areas, and spread Sevin Dust around liberally on everything afterward, as red mites can live off the bird for approximately six months, and will re-infest your birds after they come in contact with the mites again. Make sure you put it in the nesting areas, on roosts, and in dusting areas.
Also, you can take mites with you from pen to pen on your clothes, and body, so if you find mites, it is a good idea to check all your birds. The treatment of Ivomec is actually a wormer, but it is very effective in keeping mites from coming back because when the mites bite the bird, the Ivomec affects them.
Ivomec Injectable (ivermectin)
Ivomec injectable is used for treatment of worms in your fowl, and can be used to help keep external parasites, like Red Mites, down too.
Dosage
You will need a syringe to get ivomec out of the bottle, and you can use it to apply the dosage listed below by holding the birds mouth open, and dripping it into the back of its throat. Another method is to apply the correct dosage to a piece of bread, then feed it to the bird you are treating.
5 to 7 drops orally for adult size birds.
3 to 5 drops orally for bantam size birds.
It is recommended to worm your fowl on a regular basis, and this method will need to be repeated every 2 to 3 months to keep worms under control. In severe cases, you may want to retreat the bird10 days after the initial treatment, to make sure you take care of the problem.
Ivomec can be purchased at most farm supply stores in the cattle section.
Warning
Take care not to eat the eggs after treating with Ivomec until the treated fowl has laid at least five to seven eggs.
Some of the information above is from Ultimatefowl Wikipedia
Chris