DRS, once enabled, will aggregate the resources from the participating ESXi hosts as cluster resources. Its job is to load balance the DRS cluster for better utilization of the cluster resources. It does so by migrating or generating migration recommendations for VMs whenever needed. It also provides initial placement for the VMs. Migration recommendations will be generated by vSphere DRS only when it identifies a resource imbalance in the cluster. A resource imbalance is determined on a per-ESXi-host
basis. It does so by considering the resource reservations for all of the VMs on the ESXi host, comparing these against the total capacity of the host, and then checking whether the host can or cannot meet the cumulative resource reservations of the VMs.
The result will become a deviation metric, which is then compared against the migration threshold set on the cluster. DRS does this imbalance check on every ESXi host in the DRS cluster every 5 minutes.

After DRS detects a cluster imbalance, it will check the migration threshold value set on the cluster. If the deviation calculated is more than the migration threshold, then DRS will generate a migration recommendation. DRS generates a migration recommendation by simulating the migration of each VM on the ESXi host in order to recalculate the cluster imbalance metric. It will then choose a VM that will best serve in reducing the resource crunch on the host.