When you create a DGN file, you identify a seed file as a template for the DGN file. The new DGN file is actually a copy of the seed file.
Seed files do not (necessarily) contain elements, but, like other DGN files, they do contain at least one (default) model, settings, and view configurations. Having a seed file with customized settings frees you from having to adjust settings each time you create a new DGN file. If you wish, you can have a different seed file for each type of drawing you do.
Seed files are normally stored in either the ..\Default\Seed\ folder of MicroStation PowerDraft's program directory, or ..\Organization\Seed\ folder of the Configuration directory. A number of discipline-specific seed files are provided with the product, in addition to the generic seed files, "seed2d.dgn" and "seed3d.dgn."