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yes DP is Drill purpose. It carries the stigma that the rifle may have been removed from service because it was too worn for use and may prove unsafe to fire. More often than not however it means the the rifle was deemed obsolete and removed from service regardless of mechanical condition. Have it checked out buy a gun smith, (likely a good idea with any old milsurp) and go shoot the he** out of it.
Some drill purpose guns were deactivated by drilling a hole entirely through the reciever ring and chamber and wedging a piece of bar stock in. Keep this in mind, as it's rare, but will really hoop your high when you unpack it.
I've seen a DP stamped receiver / barrel once only, and should have kept it just because of that fact. But I sold it.
A few reasons can bring the DP stamp - can't shoot straight, some critical components beyond spec, etc; but in the case of that particukar rifle, it was probably simply because some DP rifles were required and some good .303's were picked and stamped and stacked with other DP rifles. It worked flawlessly, a gunsmith took a good look at it, it was in great shape and shot relatively well.
Sometimes a mismatched bolt was grounds for DP'ing. I had two DP rifles that seemed to be cobbled together from spare parts. I have another that has the DP struck out, I guess after it was returned to service. I imagine that many rifles were DP'd just because they were obsolete.