From there, users drag and drop the image’s contents into the Applications directory to install new apps on their Macs. When you double-click on the dmg, it mounts (or, more properly, attaches), revealing its contents in the Finder. Easily identifiable by their disk-on-paper icon, the “dmg” extension stands for disk image. When you download a new program for your Mac, it often comes with a “.dmg” file.