Ok, DE by itself is only one ingredient in a bag known as Diatomaceous Earth. Sometimes it goes under the name Fossil Shell Flour (by Perma-Guard). It is available in both food grade and commercial grade for lawn and garden use. If you use it around any animals or children, you need the food grade. It's a very super-fine dust. Yes they will eat it and it will be beneficial to them if they do. It will help the chickens, ducks other livestock etc. by eliminating all internal parasites, grow healthier stronger bones, beaks, feathers etc, have better joint and cardio health and lots more. I even give it to my 4 year old son. He's always out in the yard bare footed and while I am working, hand washing gets forgotten. The DE helps keep he and myself parasite free. (90% of children in rural communities get pinworms and it's usually through the bare feet and highly contractable)
You can also dust your chickens in the same manner you would spray them to eliminate external parasites. You can dust the ground heavily and as they scratch, the DE will destroy any earth-borne parasites and their eggs.
Stall-Dry is a product that has food grade DE at 65% in it as well as other ingredients (one is made up primarily of a particular clay/volcanic ash). It is about the size of barely ground black pepper. They call it pellets, but more like tiny little itty-bitty balls...sort of. It is ok for the chickens or other animals to eat it, provided you don'y use the PLUS variety which has a "fresh scent" additive. It could be safe, but I don't take any chances with another critter's life. It is used primarily as a litter additive or base layer to keep down flies, other pests and odor.
Personally I do not use Stall Dry as I use the regular DE in so many other ways, it would be redundant to purchase anything else.