Jim,
I have written an article about this on my web page but unfortunately, my provider had shut it down (my fault, I didn't login for months). I have attached it but the download link (within) is dead. It would be a good idea to host it somewhere in OpenG.org.
The short answer about DDE is that if you associate another file type to LabVIEW DDE Server, LabVIEW seeks in the file to figure if it is a LabVIEW file (VI file, Control file, LLB, etc) e.g. it doesn't care for the file extension, it looks at the file format. If it is a LabVIEW file, it opens it, if not, the request is discarded.
Now it would be a VERY good idea if that filename, instead of being discarded, were sent to some diagram node lik
e a primitive or the event structure. But it is not.
As for building your own DDE Server, the DDE tools in LabVIEW lack an important function, "DDE Server Execute", which is required to receive the requests. It has a "DDE Execute.vi" which can send requests to open files in other applications but has not the server equivalent to receive them.
See the attachment for more details.