Distance Measuring Equipment (DME) is a transponder-based radio navigation technology generally colocated at VORs.
Aircraft use DME to determine their distance (or more precise displacement) from a land-based transponder by sending pulse pairs with a precise time interval between them. The transponder echoes the pulses. The DME receiver then searches for two pulses with the correct time interval between them and measures the delay between the pulse transmission and the pulse reception.
Once the receiver is locked on, it has a narrower window in which to look for the echoes and can retain lock. A typical DME transponder can provide concurrent distance information to about 100 aircraft.
DME frequencies are paired to VHF Omni Range (VOR) frequencies. So generally a DME interrogator is designed to automatically tune to the corresponding frequency when the colocated VOR is selected. Airplane’s DME instrument uses frequencies from 1025 to 1150 MHz. DME transponders transmit on 962 to 1150 MHz and receive on 962 to 1213 MHz. The channel width is 100 kHz.
One important thing to understand is that DME provides the physical distance from the aircraft to the DME transponder. This distance is often referred to as 'slant range' and depends trigonometrically upon both the altitude above the transponder and the ground distance from it.