How the DOC Format Is Structured
DOC is the original Microsoft Word document format, the default for Word from the early 1990s until 2007, and it is built very differently from the DOCX format that replaced it. A DOC file is stored inside Microsoft's Compound File Binary format, essentially an internal mini-filesystem of named streams and storages built on OLE Structured Storage. In other words, a single .doc file is a small container holding several separate data streams, almost like a tiny disk image inside one file.
Inside that container, the main document text lives in a WordDocument stream, while formatting, style, and structural data sit in other streams. The whole thing is a proprietary binary format: rather than human-readable XML, it is compact binary data whose layout was defined by Microsoft. This made DOC efficient for its time and tightly tuned to how Word worked internally, but it also made the format complex and difficult for other software to read reliably, since you essentially had to reverse-engineer or license the specification.
That binary, interlinked structure has a real downside: fragility. Because formatting and content are woven together in a complex binary layout, a small amount of corruption can damage or destroy a DOC file, and recovery is hard. This is one of the key reasons Microsoft moved to the DOCX format, whose ZIP-and-XML design is far more open and resilient.
DOC vs DOCX
The relationship is straightforward: DOC is the old format, DOCX is its modern replacement. DOCX (introduced with Word 2007) stores the document as a ZIP package of readable XML parts, which makes it more open, more compact, more robust against corruption, and easier for non-Microsoft software to support. DOC's binary format offers no advantage over DOCX today; it persists only in files created before 2007 or by old software that defaulted to it.
For anything current, you want DOCX. Modern Word and other editors open DOC files without trouble and can save them as DOCX, which is the recommended way to modernize old documents, you keep the content and gain the robustness, smaller size, and broad compatibility of the XML-based format.
When You Encounter DOC
You meet DOC almost entirely in older documents: files written in Word before 2007, documents from legacy systems, or templates that were never updated. When you open one, the practical move is usually to save it as DOCX if you will keep editing it, or export to PDF if it is finished and you just need to share or print it. There is no reason to create new DOC files; the format exists today purely as a legacy you convert away from.
Limitations
DOC's limitations are the reasons it was retired. Its proprietary binary structure is harder for non-Microsoft software to read accurately, so formatting can be misinterpreted in other editors. It is more prone to corruption than DOCX, and recovery is difficult. And it lacks the openness and compactness of the modern XML-based format. Its one practical role now is compatibility with very old files, and even then, converting to DOCX is the better long-term choice.