What attackers do. Attackers abuse the way Windows finds and loads DLLs, for example by placing a malicious DLL where a program will look for it first or replacing a legitimate one, so their code runs inside a trusted program. This serves Persistence, Privilege Escalation and Defence Evasion.
How to defend. Restrict write permissions on application and system directories, and use application control that covers DLLs. Enable safe DLL search mode and fix software that loads libraries from insecure paths. Endpoint tools that record image loads provide visibility.
Signs to look for. Look for DLLs loaded from unexpected paths, unsigned DLLs in folders of signed applications, and new DLLs appearing in application directories outside updates. A common gap is not collecting image load events.