Sharath is correct but there are many different ways in which a DC-topo is used.
The work of DC topo is to allow the tool to optimize better based on other inputs like physical constraints, physical only cells etc... that we usually do not provide to DC in normal mode.
For physical constraints we usually supply the DEF to DC topo or it can also accept the MW database. You can separately manually specify the physical constraints also (like die size etc..) and also placement bounds, keepout margins. The main objective is to allow the tool to undertand the virtual floorplan so that it can use it effectively while optimizing.
.
The optimization engine is more robust and accurate. While DC uses the command compile to optimize, DC topo uses compile_ultra. You can man the command and learn more about it.
.
However, DC topo is not always used with the DEF or the placement constraints. It can simpley be used like DC but with parasitics information like TLU+ and SPEF so that the tool is able to do a better optimization based on net capacitances because as the technology is progressing optimizing at every level based on real life parasitic values is becoming essential.
Ro9ty