DPI (Dots Per Inch) is the resolution metric for the output device, such as a platesetter (CTP) or printer, which shows the number of physical spots that can be created per inch. Unlike PPI and LPI, a high DPI merely indicates the device's physical capability, not higher quality for print.
DPI's critical role is to provide the technical infrastructure for accurate tonal reproduction. To fully display 256 tonal levels (from 0% to 100%), each Halftone dot must be composed of a sufficient number of physical device spots. This high accuracy is guaranteed by the DPI, and a lack thereof leads to stepped halftone dots and the loss of highlight details.