Incredibly noobish mod questions

[Snacktime]

I've been playing this game for a while but have never before used mods, so here goes: how do you get mods to work?

I gather you put the .dm file in the mods folder. But then how do you decide which mods to use for which game? If I'm playing multiple games, is there a way to control which ones use the mods? If I have a game already going will adding a mod to my Mod folder mess anything up?

For MP, I take it everyone needs the mod in their Mod folder? What about mods that have a bunch of extra files for them, where do those go?

Sorry to bug y'all, I tried to find the answer on my own but failed.