DRC systems (Sonarworks, Dirac Live, IK Multimedia ARC) use a calibration microphone to measure the room's frequency and phase response at the listening position. The software calculates a correction filter — an inverse of the measured problems — and applies it system-wide.
DRC works best for frequencies above ~200 Hz, where the sound field is more predictable. Below 200 Hz (the modal region), acoustic treatment (bass traps) is more effective because room modes create cancellations that DSP cannot fully correct (boosting a null just creates more cancellation). The best results combine physical acoustic treatment with DRC.