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DirectDraw is part of the DirectX Application Programming Interface (API), used to render 2D graphics using hardware acceleration, when available, in applications that require it. It cannot render 3D graphics (for that purpose, Direct3D is used). It has been replaced by Direct2D (and also Direct3D) in newer versions of the DirectX API (deprecated from DirectX 7 onwards), where it is grouped with a number of different APIs in a DirectX Graphics package. Technically deprecated since DirectX 7, the DirectDraw API is still included with the DirectX package, but it is not updated, and programmers would have to use DirectX 7 or older to use the API properly in development. It provides direct access to the video memory and display adapter hardware for applications that require high performance graphics rendering.
Other DirectX related glossary:
DirectX Media Objects