What are RAW & DNG files. Is it better than using JPEG

To make this easier, lets first understand what JPG is

JPEG is more or less the gold standard for sharing images for a long time now due to the advantage in filesizes and the ability of all (image editing) Softwares and the ability to tweak the quality of the image to achieve a smaller file size. All these mean (in order to achieve small filesizes) JPG only stores the required information to display a fair reconstruction of the image and not the whole image itself.

Not having the additional information (the information in the areas of Darker shadows & blacks along with Highlights & whites) reduces the ability of what is possible during postprocessing.

RAW files are files that store almost all the information captured by the sensor much wider range of information in them. To give a sense/scale of the extra information stored.

• JPG stores 8 bits of information which gives a range of 0 to 256
• RAW stores about 14 bits (12 to 16 bits which relates to a range of about 4096 to 65,536 ... typical being 14bits which corresponds to 16,384)
• Generally speaking low-end cameras provide a 12-bit raw file, Full-frame/high-end DSLRs provide 14-bit raw files and 16bits in medium/large format cameras

RAW files are specific to each camera manufacturer and often softwares will require an update to support files from a new camera.

DNG is a patented (by adobe) but open, lossless format based on the TIFF standard which makes it one of the widely supported file formats by most advanced image-editing software available. Most camera RAW formats have a converter to DNG format.

In short DNG format is an interoperable file format which can store all the information stored in a RAW file but still be opened in all softwares. DNG makes it possible to make different processing steps across different software.