DGN (design) is the name used for CAD file formats supported by Bentley Systems' MicroStation and Intergraph's Interactive Graphics Design System (IGDS) CAD programs.
For now, DGN has two major version: V7 and V8. They are very different file format. DGN V7 is designed a long time ago and referenced as The Intergraph Standard File Formats (ISFF). DGN V8 is introduced in Microstation 2004.
DGN V7 consists of several types of binary files.Design files are sequential, variable-length files with variable-length records for the Design File Header, file set-up information, graphic elements, and non-graphic data. User-defined elements begin with the fourth element. Design files are typically designated with the extension ".dgn". Cell libraries store cell definitions for placement in design files. A cell library consists of a file header (type 5) element followed by individual cell descriptions. Each cell is a complex element that contains a cell library header (type 1) element and component elements. Cell descriptions can be nested. Nested cells contain a type 2 header and component elements. If the cell library already contains the nested cell, its component elements are not repeated. Cell libraries are typically designated with the extension ".cel".
DGN V8 is an updated specification of the original Intergraph DGN file format. It's stored using Microsoft's Compound File. A full description of Compound File is available here. A compound file contains a Root Storage and many other Streams.