When a Type 3 LSA is sent from a PE router to a CE router, the DN bit in the LSA options field is set. This is used to ensure that if any CE router sends this Type 3 LSA to a PE router, the PE router does not redistribute it further.
When a PE router needs to distribute to a CE router a route that comes from a site outside the latter's OSPF domain, the PE router presents itself as an ASBR (Autonomous System Border Router), and distributes the route in a type 5 LSA. The DN bit must be set in these LSAs to ensure that they are ignored by any other PE routers that receive them.
DN-BIT loop avoidance is also supported.