Even without a DRO, an edge finder is helpful. Without a DRO, you tend to need to do your measurements with the hand-dials (and correct for backlash of course!), but the theory of an edgefinder is the same. The purpose of the edge finder is to 'find' the edge of a part.
Consider you have a part, a block 2x2x2. The drawings say to drill a hole 0.250 inches from the top and the right. There are a few ways to do that.
First, is to try to measure off the machine, then try to pick up that point. This is going to be off in the realm of +/-10 thou, so perhaps good enough, perhaps not.
A second way to do that is to do the measurement on the mill! First, you edge find the 'right' side. Now you know that the 'spindle' is .100 (given a .200 round edge-finder, you actually find yourself a certain distance off the side!) to the 'right' of the rightmost edge of the part. Now you can use your hand dials to advance another .350 (.100 + .250), so now you know your spindle is in the correct place as far as the x axis goes. You can repeat that off the 'top' of the block and do the same thing! Now you should be accurate to within a few thou!
This isn't limited to just holes, it is any sort of feature on a part! If you're particularly good with handwheel backlash (or have a DRO!) you can even use edge-finding both the left-and-right sides to find the 'middle' of a block, which is often quite useful as well.