Some people (I used to) put it in the feed to use it as a worming preventative. No more than about 1-2% of the feed, I believe.
Then there are a lot of people who say it only dessicates worms when dry- so useless in the feed- that's why I switched to pumpkin seeds. It is used also to kill insects in the coop.
You can fix them a dust bath with it and also spread it in the coops. My chickens had DE in the coops but got mites anyway. BUT I didn't put the DE on the chickens, which is why I think it didn't work.
Now I use my DE and sweet PDZ to place on the floor of my shed coop sparingly to keep the droppings dry until I scrape them up every 2 days.
Some people have had GREAT success with DE, others really are against it- saying it's a waste of money.
I like it a lot, but definitely consider it a preventative, not a treatment for an actual problem. There are many threads on DE you can read if you are interested- do a search if you wish.
Don't breathe it in- it can damage your lungs.