In many cases, particularly on large projects, it may be that a design model consists of the active model, plus one or more references to other models. These references may be to other models contained in the open DGN file, or they may be models contained in other DGN files.
When other models are included as references to the active model, they still retain the link to the original model. This means that any changes to the original model will be reflected in the references. Using references gives you the option of having several designers work on a project simultaneously. For example, a civil designer could be working on the earthworks model, an architect on the building model, and a mechanical designer on the plant model. Each could have the other models referenced to their own model to keep abreast of any design changes in the other disciplines.