A hugely influential open source MUD engine that originated at the University of Copenhagen (Or, in Danish, the Datalogisk Institut ved Københavns Universitet-- DIKU). You would be hard pressed to find a MUD engine commonly in use today which does not show heavy Diku influences (Everquest, for example, resembles nothing more than a graphical version of Diku..), and really to be honest a majority of the running MUDs you'll come across are running a direct code descendent of the original Diku. Take a look at the family tree here if you're interested in finding a good MUD engine:
http://www.dikumud.com/diku/Children/index.asp
DikuMUD, intended as a bigger, better and faster reimplementation of something called Abermud (which apparently had a limit of 18 simultaneous players and tended to rarely if ever spawn MUDS with more than 500 rooms), sparked a revolution in terms of huge-scale MUDs with real communities and complex multifaceted worlds. The best way to understand what makes a Diku-style MUD is to play one, but generally within almost any mud you will come across the structure of grouping and user communication, the layout of the different sections of the world, the way that the character types and skills are set up, and the way (if permissions are set to let you) to freely create and edit the world you move around in from within the MUD while logged in as a player, will all in nature be simple reiterations of the standard Diku way of doing these things.
The creators of the original Diku engine have since moved on to create something called ValhallaMUD, the code for which is apparently *not* publicly available.