DD is an HTML tag. It is meant to be the description part in a description list. It should contain information that explains or clarifies or defines what was contained in the DT tag that should precede it.

The spec

DD appears in HTML 2.0. It is one of those tags that improve with age, like a fine red wine. It is defined as

<!ELEMENT DD - O %flow>

... a charming SGML chunk meaning that the tag need not be closed, and that it contains %flow. What is %flow ? It is defined as (%text|%block)*. This means block level elements and text level elements, that's to say almost anything you can think of.
You can nest a DL list inside a DD element.

At this point we have only discussed the content of a DD element. But where can it appear ?
The spec is quite specific (res ipsa loquitur):

<!ELEMENT DL - - (DT | DD)+>

... and this is the only place where DD appears in the HTML 2.0 spec. And this means, people,

You can put a DD only inside a DL element. Not on its own. Never.

or rather, you can put it anywhere, but that is not legal HTML. Why should you care ? Accessibility, portability, being nice.

More spec

Not much to say here. The definition does not change in HTML 3.2 and HTML 4.0. The above big dictum still holds.
I see that you are so hip that you want to know about XHTML. Things will not change much, but as you well know you will be required to close the DD tag with a corresponding </DD>.
After scuba diving into the W3C site and poking at the XHTML 1.1 DTD, I come up with the same damned fact about the DD element being legal only inside DLs. And of course, since XHTML is XML, all tags need to be closed, so you need to provide </dd> tags. Notice also that in XHTML all markup must be in lowercase, so the tag is in fact dd, and not DD.

But I wanted to indent

Use the BLOCKQUOTE element. Use wisely the &nbsp; for things like poetry. Outside of Everything2 you should be using CSS anyway: it allows fine control, and cleanly puts presentation where it belongs.

You sound like a very repressive, disturbed person

Yes. I like standards. I side with the W3C. The spec is right, the world is wrong. You do want portable content, don't you ? You don't want your WUs to be quoted in a FAQ as "the most fucked up example of markup this side of BLINK", do you ? You are noding for the ages, right ?
So, read the E2 HTML Tags, read the Everything University, look inside your heart and only use the DD tag inside a DL list.