Here's the program I've been using for years without any adverse effects. It's also worked for several people I know.
First, use DE (fresh water human grade only please - nothing less) sparingly around the barnyard, especially in dust-bathing areas. If you see it, you've used too much. Apply wearing a mask and without birds in the barn. Mix well into the soil as well as into the flooring of your coop before adding new bedding.
Monitor weekly to monthly for mites. (They can be brought in by wild birds, despite all DE treatments.)
If you find evidence of bugs, determine what kind. If they're light colored and are traveling along the feather shafts, combined with strips of missing feather (very small) they might be feather-lice. In that case, only external (non-absorbed) products will work. They are not deadly directly, but they act against the chicken's first line of defense: their feather coverage. So indirectly, they are problematic.
Most other bugs are blood-taking and and can be quite deadly. Mites and lice can cause anemia, lethargy, pasty vent, and also death. They can bring a bird down surprisingly fast, within a day if you don't notice them. So you don't want to mess around with them.
For all cases, I've used sevin dust (5%, not 7%) sparingly. Alternately, there's a product called "poultry dust" available at most feedstores or online. This is what I'm currently using and am quite pleased with it. It also seems to have a better safety margin.
Buy ahead of time. Dust the birds with that, wearing a mask and keeping their head sheilded from the dust. Use small amounts. Parmesan cheese shakers are awesome for this. Ruffle gently into their feathers. You don't want to use so much that you see it afterwards.
Use the same in the bedding, particularly around nest boxes. Stir the bedding so that it spreads and doesn't clump.
IN case of mites/lice, you can also use ivermectin IN ADDITION to dusting the premises. But you MUST dust the premises at least. Drop on is my choice as it allows you to pick up each bird and examine their weight to see if they're in the crises zone. You also know that each bird got treated definitely.
DE is useful, but it will NOT treat an established case of mites or lice in a timely enough manner to prevent potential illness/death. Use it as part of a prevention program, but do not use it as a treatment, please.
And believe me - I've been such a big proponent of DE for years that I was actually made fun of for by some old timers it a number of years ago. If that was its forte, I would let you know. It's not.
