The way I have always understood it is the DE is dead diatoms, a very, very small, exoskeleton critter that lives in the oceans.
The dead bodies, if you will, act like shards of glass to pests like fleas, worms in animals, etc. I do know from experience, baby animals 6 wks or less will die if exposed, they basically get cut up in their intestines. I also know it is an irritant if you inhale it, if inhaled enough, I am sure it could cause a lot of damage. I have not ever heard of it causing cancer. The stuff has been around a long time, we have used it for many things forever. I also know it will irritate the eyes...but that is it.
Hope that helps and if there is someone who knows different, please share!!