DR is maintained along the steered course from fix to fix, but DR can be "reset" to an EP if you have a good one. DR is a plot of the track you have steered, are steering, and will steer at the speed you observe on your log, and distance observed on your knot log. EP is estimated position, a "best guess" based on all navigational factors you have at hand, including historical info. In general, DR error can be estimated as a percentage of your speed, a few degrees of course error due to compass error or helmsman capabilities, historical or observed set and drift, leeway, or calibration errors. By knowing these errors, and applying them along your track, you can build a "wedge" (expanding with errors as time since last fix increases) within which you are quite certain your current actual position is. Then if, for example, you have a sounding that corresponds to a depth you can correlate within the wedge you will estimate that to be a much more accurate position than the DR location. If you want to reset your DR to that ESTIMATED position, that's the navigator's or captain's call. When you get a fix, you always reset your DR to that FIXED position. You can then evaluate your error between DR and the fix and determine whether the factors you use in determining your EPs (or building your wedge) were good.
In this age of near continuous fixes, DR and EP are being used less and less. If GPS is not available for whatever reason, and you're away from visual navigation aids, making log entries allowing for accurate DRing and good EP estimates from noon sight to noon sight, or other fix source and interval, will be invaluable.