DCC
Again, go to the mIRC Options window. On the left-hand menu there is an entire category labeled "DCC". Click it. The branch name itself is what you want to deal with in your case (not it's little branches beneath the "DCC" header).
Now you see two little submenu thingies. One says "On Send request:" and the one below it says "On Chat request".
*That's because DCC is both for sending files and private chatting. (See /msg above)
If you want to disable DCC, just choose the "Ignore all" option on chat or Send, depending on which you want to block.
Using DCC is pretty straightforward. Chat was covered above in the guide, but I'm assuming you're asking about sending/receiving files.
To send a file to someone, the easiest way is to right-click their name in the channel window. You'll get a little pop-up menu. From there, select "DCC" which will expand and give you the options to "Send" or "Chat". Clicking "Send' will give you a browser window so that you can select a file. Once you've selected it you just have to wait for the receiver to accept the transfer and it'll be on its merry way.
If that doesn't work, then there is another option you'll have to mess with to get DCC file transfers working. Go back to mIRC Options. Again, go to the "DCC" branch, but this time select the "Folders" subbranch. In the "DCC Ignore" option, you'll want to set it to "Disabled".
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