DRO's are simply counters, they have nothing to do with accuracy, or speed or anything else.
The thing that decides on accuracy is the number of "steps" or pulses per inch or mm.
If your machine has 1000 steps per inch, then the best accuracy you can get is 1 thou. Any less than this and clearly accuracy suffers accordingley. Speed is set by the inches per minute setting on your motor tuning.
If you are moving two axis together then the relationship between those two axis is tangential. Mach 3 will move the furthest moving axis at the speed set in motor tuning. The other axis will move more slowly, but in time with the first axis, in the ratio of the tangent of the angle between the start and finish points. It sounds a bit more complicated than it is.
We know one or two of the angles from our schooldays - a 3,4,5 triangle for example, one axis would move 4 units whilst the other moves 3 (5 being the hypotenuse) and a 45 degreen triangle when the two sides are equal.
There may be others, but the vast majority are not simple numbers, and the short moving axis will have to be truncated. Even more complicated in a circular movement. It then might have to be truncated again, dependent on your "steps per unit figure"
Machs maths are done to 12 decimal places and then rounded up or down, and therefore the actual error is less than the error you see on the DRO.
In the end Mach 3 decides how many pulses to put out to your "stepper" - and the DRO merely counts the number of pulses and then
translates this into a figure you can understand.
I must agree with Hood though. On a properly set up machine with realistic figures for step per inch, I have never seen "errors" more than 1 or maybe 2 tenths of a thou.