Ok this is how DKP work. In our guild (and most guilds) we use a bid system, and we only use DKP on T6 bracers/belt/boots/shoulders.
DKP are awarded on boss kills which you can later spend bidding for T6, allot in the same manner like you bid at the AH (except that there is no "buyout price" for DKP).
Let's say that the leader says:
Public auction is now open for [Long Bo Staff]. Initial bidding will begin at 5. Minimum bid increment is 5 (Ties DISABLED). Please /w (name_of_leader) with bid amount to place a bid.
[Long Bo Staff] will be the item that you will bid for. An initial bidding of 5 means that you cannot whisper the leader saying a number smaller than 5. Minimum increment means that you have to bid in multiples of 5 (5-10-15-20-etc).
Before you start bidding you can find out your current DKP by whispering the leader saying "?dkp" (without quotes).
Also, since DKP are awarded per person and not per character, you can bid on a character that is not in the raid. But keep in mind that you have to get that character in front of the instance before the raid starts, so in case that you win the bid, you can log in fast, enter the instance and receive the item. Also, when you win an item, please specify your group so that the leader doesn't have to spend time searching to see what group you are in.
Read this paragraph only if you are still unclear on the bidding method. Let's say Sayuki is the leader and that Bidding starts on [Long Bo Staff]. The minimum bid is 5. To place that bid you have to whisper Sayuki saying "5" (/w Sayuki 5). If someone already placed a bid of 5 DKP then you can only place a bid higher than that (must be a multiple of 5). You cannot bid a number higher than your current DKP amount.
Here is a list of the most important bosses that you are awarded DKP for killing them:
Kil'jaeden / Felmyst = 10 DKP each
Twins = 5 DKP each
All other SWP bosses = 5 DKP each
Illidan Stormrage / Mother Shahraz = 10 DKP each
Illidari Council = 5 DKP for all 4 council men (not 5 dkp for each "boss")
All other BT bosses = 5 DKP each
Archimonde = 10 DKP
All other Hyjall bosses = 5 DKP each
I hope this post clarifies all questions on DKP. If there is still something unclear, please leave a comment bellow and i will edit my post.