The need for DC-DC Converters came about when digital and analog electronics started being used in Radar Displays, Auto-Pilots, Control Systems and Process Computers, the last two might have thousands of sensors and some of these needed different operating supply voltages.
The first ones built on boards with transformers, diodes, capacitors and a single resistor that sets the output voltage from a selection of taps on the transformer secondary winding. Then with changes in technology the majority of these became solid state. There are still some that are not solid state due to their high-power outputs (for example, Railway Sub-stations that power sections of lines).
What they do
Any DC-DC Converter takes a DC source from a mains powered power supply or a battery or battery bank and converts that to a regulated supply (for example, 5V +/- 0.001V). The output supplied to a device or sensor that is part of a system interface module and this saves money and space on having to install another power supply, since only low power is required to power this device or sensor.
How they work
The DC-DC converter input is switched by solid state switches (DIACs) to produce a square wave across the transformer primary winding and then the transformer secondary winding produces the required output voltage, this is then rectified and regulated to provide the DC supply at the correct voltage level (for example, 5V to 12.5V).
These have now gone solid state with FET based input chips that take the battery supply from 3.3V to 5V DC and supply a regulated 5V or other desired voltage level. Higher powered versions use Heat Sinks to keep the chip within its operating range.
A wide range of system boards will use DC-DC Converters to enable the cost effective use of certain components (for example, memory cards needing 5V +/- 0.00001V) or other recording media, such as usb backup or camera cards, since the quality of recording depends on the accuracy of the supply voltage to match the source device supply voltage.