I've used food grade DE for 5 years now. I used to put about the 2% ratio in their feed, but I no longer do that after hearing about some study that said intestines of hens that had been raised eating the stuff were unnaturally dessicated. I don't have a link to that, but it was an old member, Wes in TX, that told me about the study.
The way I use DE now is to put about a cup or two in each feed bag when I open it in order to kill any bugs that may find their way into the feed. It does coat the feed just fine. I lightly sprinkle it in the straw of each nest, periodically under the main roost, and occasionally on the birds themselves. I make sure that a broody, who sits for weeks on end in a nest, is dusted with DE, as is her nest. Never had lice or mites in this flock. The one rooster that came here with them was treated with DE during quarantine and it fixed the problem.
DE is not a cure-all, though to hear some talk, you'd think it was the latest cure for cancer or something. I don't count on it for worming, no matter what anyone says. I use it because I prefer not to use poisons around the birds for pest control. It has trace minerals that are supposedly good for the birds and it does dry out the poop under the roost--we all know a dry coop is a low odor coop.