A differential compression check measures "seal" of the piston rings and valves for a given cylinder. They are required by 14CFR43 app.D as one of the minimum requirements for 100hr/Annual inspection. They are also in every manufacturers inspection requirements, sometimes more often than the minimum requirement.
The general procedure may be found in the AC
-43 1A/2B, most of the time the specific procedure for the model of tester being used may be found on the case or body of the gauge set. Basically, a DPC tester is a set of air pressure gauges with a fixed orifice between them. To perform a check;
Run the motor, and warm it up to operating temperature,
Remove the most accessible spark plug from each cylinder,
Install the air adapter in the #1 cylinder,
Rotate the prop to find TDC (Top Dead Center) on #1 piston,
Connect the air source and gauge set,
Have someone hold the prop!!!! (VERY VERY Important)
Apply 80psi to set, open the air valve and observe pressure drop on the second gauge.
Move the prop slightly to ensure TDC, ring, and valve seating.
If the pressure drop is more than 20 psi (25%), it fails the check, listen for air leaking at the exhaust, intake, and crankcase.
If it fails there are some things you can do to seal up the valves and rings to troubleshoot, but that's it in a nutshell. There is another about this article in AMT, http://www.amtonline.com/
, same deal, Article archives, Technology-recip, #3 02/2004 and #30 5/2000. I'm not trying to advertise for AMT, but it has some really good articles from time to time.
Hope it helps