Mouse DPI is the number of steps it reports while moving on one inch surface. Dot per inch (DPI) is actually the number of individual dots that can be placed in a line within the extent of one inch. It determines the sensitivity of mouse. Factually, the expression of movement of mouse in terms of DPI is incorrect. Correctly, it is expressed in counts per inch (CPI).
The higher the CPI, the faster the cursor moves with mouse movement. However, software can adjust the mouse sensitivity, making the cursor movement faster or slower than its CPI count.
DPI is fraction of an inch of mouse can count when a mouse moves. A mouse with 800 DPI can count up to 1/800 of an inch of movement while a mouse with 5000 can count up to 1/5000 of an inch. Better say, if a mouse has 4 CPI, it means mouse has to move four times for every inch it travel.
A standard mouse has DPI in range of 400-800 while it can go up to 10,000 in high end mouse. It is to be noted that DPI also depends on screen resolution. Higher the resolution of screen (number of dots/pixels on the entire screen), the curser will appear moving slower as it has more pixels to cross.