A DIFF file is a single file showing the differences between one or more text or source files. It is created by Mercurial, a control management tool for developers to obtain differences between files and apply the patches. Through DIFF files, developers share their changes with other developers so that the changes can be updated to generate a newer version of the text files. DIFF files can be opened in Mercurial.
DIFF File Format
DIFF files are textual files that contain textual differences of the same file edited by multiple developers. If you are a Windows User and have used the builtin WinDiff application that comes bundled with Windows OS, you will have a better idea of the DIFF files. The individual different files being worked out by developers are also known as a PATCH file.