The oldest equity model: a share is worth the present value of the dividends it will pay. It suits mature companies that distribute most earnings, banks and utilities especially, where free cash flow is hard to define. It discounts at the cost of equity, not WACC, because dividends belong to shareholders alone.
Earnings per share grow along the revenue growth path. The payout ratio fades linearly from its initial to its terminal value, reflecting that maturing companies pay out more as reinvestment opportunities shrink. The terminal term is the Gordon growth formula applied to the first post-horizon dividend.
The weakness is that dividends are a policy choice, not a measure of cash generation. A company that buys back shares instead of paying dividends looks worthless in a strict DDM. Treat it as one view among several.