DMG file is used by Apple Mac OS X Disk Image files. Mac OS X natively support DMG files with the bundled Apple Disk Utility, and can mount and treat them as though they are physical disk volumes. Mac OS Classic originally used the IMG file format for the same purposes, though this has now been superseded by DMG format.
DMG files are similar in nature to other disk image files such as ISO in that they contain a folder and file structure which can be mounted and treated like a physical volume. As well as browsing the contents of a DMG file, it can also be used as the source to create CD or DVD copies. However, DMG files can use a variety of different file systems including HFS, HFS+, Linux and Fat32, and are usually compressed, which may make them incompatible with other software on other operating systems such as Windows. DMG files are often used to distribute software in the same manner as an EXE file is used for the Windows platform, and may be password protected to prevent unauthorized users mounting and using the image.
You can open DMG file in Mac OS X using the Apple Disk Utility, which is bundled as part of the operating system. However, the DMG file format is new to OS X and as such is not compatible with previous versions of Mac OS. DMG files are specific to Mac OS X, though can be opened in Windows using an application such as TransMac. Additionally, tools such as IsoBuster and DMG2ISO can be used to convert DMG files to more recognizable formats such as File extension ISO or File extension BIN, which can be opened using a wide range of applications or burnt straight to disc using software such as Roxio or Nero.
For more general information about files, file extensions and registry you can read one of the following articles:
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