Add new conceptual docs for configuring DSC settings

docs/concepts/configure-dsc-settings.md

@@ -0,0 +1,367 @@
+---
+description: >-
+  Learn how to configure DSC's behavior using the settings system, including default settings,
+  user settings, and policy settings for administrative control.
+ms.date: 08/12/2025
+title: Configure DSC settings
+---
+
+# Configure DSC settings
+
+Microsoft's Desired State Configuration (DSC) platform uses a layered settings system that allows
+you to customize its behavior. You can control various aspects of DSC operation through JSON
+configuration files that are evaluated in a specific priority order.
+
+Understanding how to configure DSC settings enables you to:
+
+- Customize DSC's default behavior for your environment
+- Set user-specific preferences for development workflows  
+- Implement organization-wide policies that override user settings
+- Control resource discovery paths and execution parameters
+
+## Settings file hierarchy
+
+DSC evaluates settings files in the following priority order, with later files overriding earlier
+ones:
+
+1. **Default settings** - Built-in configuration shipped with DSC
+2. **User settings** - Custom configuration you create
+3. **Policy settings** - Administrative settings that override all others
+
+This layered approach ensures that administrators can enforce organization-wide policies while
+still allowing users to customize their local DSC experience within those constraints.
+
+### Default settings file
+
+DSC ships with a default settings file named `dsc_default.settings.json` located in the same
+directory as the DSC executable. This file contains the baseline configuration that DSC uses when
+no other settings are specified.
+
+> [!IMPORTANT]
+> Don't modify the default settings file directly. Your changes will be lost when you update DSC.
+> Instead, use the user settings file to override specific values.
+
+### User settings file
+
+Create a file named `dsc.settings.json` in the same directory as the DSC executable to override
+default settings. This file should contain only the settings you want to change, not a complete
+copy of the default settings.
+
+The user settings file is where you define your personal preferences and development-specific
+configurations. Common use cases include:
+
+- Customizing resource discovery paths
+- Setting default execution parameters
+- Configuring logging levels for development
+
+### Policy settings file
+
+Administrators can create a policy settings file that overrides both default and user settings.
+This file ensures that certain organizational requirements are enforced regardless of user
+preferences.
+
+The policy settings file location depends on your operating system:
+
+- **Windows**: `%ProgramData%\dsc\dsc.settings.json`
+- **Linux/macOS**: `/etc/dsc/dsc.settings.json`
+
+Policy files are typically writable only by administrators but readable by all users, ensuring
+that organizational policies can't be bypassed by individual users.
+
+> [!IMPORTANT]
+> Policy settings are designed for organizational environments and illustrated purposes only.
+> They cannot be enforced for users with administrator privileges and are not managed by
+> enterprise tools like Group Policy Management. Users with sufficient privileges can modify
+> or override policy settings on their local systems.
+
+## Settings file format
+
+DSC settings files use a versioned JSON format. The root object contains a version number as the
+key, with all settings nested under that version. This structure allows DSC to maintain backward
+compatibility as the settings schema evolves.
+
+```json
+{
+  "1": {
+    "resourcePath": {
+      "allowEnvOverride": true,
+      "appendEnvPath": true,
+      "directories": []
+    },
+    "tracing": {
+      "level": "WARN",
+      "format": "Default",
+      "allowOverride": true
+    }
+  }
+}
+```
+
+> [!NOTE]
+> Settings files must contain valid JSON. Comments are not supported in JSON, so document your
+> configuration choices in separate documentation files. The version number "1" corresponds to
+> the current settings schema version and must be included as the root key.
+
+## Available settings
+
+DSC supports the following configuration settings organized by category:
+
+### Resource path settings
+
+The `resourcePath` setting controls how DSC discovers and loads resources from the file system.
+
+```json
+{
+  "1": {
+    "resourcePath": {
+      "allowEnvOverride": true,
+      "appendEnvPath": true,
+      "directories": [
+        "C:\\CustomResources",
+        "C:\\CompanyResources"
+      ]
+    }
+  }
+}
+```
+
+**Properties:**
+
+- `allowEnvOverride` (boolean): Whether to allow the `DSC_RESOURCE_PATH` environment variable to
+  override the configured directories. When `true`, the environment variable takes precedence over
+  the `directories` setting. When `false`, only the configured directories are used.
+
+- `appendEnvPath` (boolean): Whether to append the system's `PATH` environment variable to the
+  resource search paths. When `true`, DSC searches both the configured directories and all
+  directories in the system PATH. This setting is ignored when `allowEnvOverride` is `true` and
+  the `DSC_RESOURCE_PATH` environment variable is set.
+
+- `directories` (array of strings): Custom directories where DSC should search for resource
+  manifests and executables. These paths are searched before the system PATH when
+  `appendEnvPath` is `true`.
+
+### Tracing settings
+
+The `tracing` setting controls DSC's logging and diagnostic output behavior.
+
+```json
+{
+  "1": {
+    "tracing": {
+      "level": "WARN",
+      "format": "Default",
+      "allowOverride": true
+    }
+  }
+}
+```
+
+**Properties:**
+
+- `level` (string): The minimum log level to output. Valid values are `ERROR`, `WARN`, `INFO`,
+  `DEBUG`, and `TRACE`. Higher levels include all lower-level messages (e.g., `WARN` includes
+  `ERROR` messages).
+
+- `format` (string): The format for log output. Valid values are `default` for standard
+  console output, `plaintext` for unformatted text output, and `json` for structured JSON logging.
+
+- `allowOverride` (boolean): Whether command-line arguments or environment variables can override
+  the configured tracing level. When `false`, the configured level is enforced regardless of
+  other settings.
+
+## Common settings scenarios
+
+### Example 1 - Custom resource paths
+
+Configure additional directories where DSC should search for resources:
+
+```json
+{
+  "1": {
+    "resourcePath": {
+      "allowEnvOverride": true,
+      "appendEnvPath": true,
+      "directories": [
+        "C:\\CustomResources",
+        "C:\\CompanyResources\\Production"
+      ]
+    }
+  }
+}
+```
+
+This setting extends the default resource discovery mechanism to include your custom resource
+locations, making them available for use in configuration documents.
+
+### Example 2 - Development environment configuration
+
+Create a user settings file optimized for development work:
+
+```json
+{
+  "1": {
+    "resourcePath": {
+      "allowEnvOverride": true,
+      "appendEnvPath": true,
+      "directories": [
+        "C:\\Development\\MyResources",
+        "C:\\Development\\TestResources"
+      ]
+    },
+    "tracing": {
+      "level": "DEBUG",
+      "format": "Default",
+      "allowOverride": true
+    }
+  }
+}
+```
+
+This configuration increases logging verbosity for troubleshooting, adds development resource
+paths, and maintains flexibility for environment variable overrides.
+
+### Example 3 - Organization-wide policy enforcement
+
+An administrator might create a policy settings file to enforce security and compliance
+requirements:
+
+```json
+{
+  "1": {
+    "resourcePath": {
+      "allowEnvOverride": false,
+      "appendEnvPath": false,
+      "directories": [
+        "\\\\CompanyShare\\ApprovedResources"
+      ]
+    },
+    "tracing": {
+      "level": "WARN",
+      "format": "Default",
+      "allowOverride": false
+    }
+  }
+}
+```
+
+This policy configuration restricts resource usage to approved company resources, disables
+environment variable overrides for security, and prevents users from changing tracing settings.
+
+## Best practices
+
+### Use minimal configuration files
+
+Only include settings you need to change in your configuration files. This approach:
+
+- Makes your configuration easier to understand and maintain
+- Reduces conflicts when DSC updates change default values
+- Clearly shows which settings you've customized
+
+### Document your settings choices
+
+Keep documentation alongside your settings files explaining:
+
+- Why you changed specific settings
+- What impact the changes have on DSC behavior
+- Any dependencies between settings
+
+### Test settings changes carefully
+
+Before deploying settings changes:
+
+- Test them in a development environment first
+- Verify that existing configuration documents still work correctly
+- Check that the settings produce the expected behavior changes
+
+### Use policy settings judiciously
+
+Policy settings override all user preferences, so use them only for:
+
+- Security requirements that must be enforced
+- Compliance settings that users shouldn't override
+- Organization-wide standards that ensure consistency
+
+## Troubleshooting settings
+
+### Verify settings are being loaded
+
+Use DSC's debug logging to verify which settings files are being read and which values are being
+applied. Enable debug logging in your user settings:
+
+```json
+{
+  "1": {
+    "tracing": {
+      "level": "DEBUG",
+      "format": "Default",
+      "allowOverride": true
+    }
+  }
+}
+```
+
+When debug logging is enabled, DSC outputs detailed information about:
+
+- Which settings files are being loaded and from what locations
+- The final resolved values for each setting after applying the hierarchy
+- Whether environment variables are overriding configured values
+
+### Check file locations and permissions
+
+Ensure that:
+
+- Settings files are in the correct locations (same directory as DSC executable for user settings)
+- Files have proper read permissions for the user running DSC
+- JSON syntax is valid
+- The version number "1" is included as the root key in the JSON structure
+
+### Understanding setting precedence
+
+Remember the priority order when troubleshooting unexpected behavior:
+
+1. Policy settings always win
+2. User settings override defaults
+3. Default settings provide the baseline
+
+If a setting isn't working as expected, check whether it's being overridden by a higher-priority
+file.
+
+## Security considerations
+
+### Protect sensitive settings
+
+If your settings files contain sensitive information:
+
+- Use appropriate file system permissions
+- Consider using environment variables or secure storage for sensitive values
+- Avoid storing credentials directly in settings files
+
+Currently, DSC's available settings do not contain sensitive data, but future versions may
+introduce settings that include credentials, tokens, or other sensitive information.
+
+> [!WARNING]
+> When using `TRACE` level logging, DSC may output sensitive data including configuration values,
+> resource parameters, and system information. Use TRACE logging only in secure development
+> environments and avoid it in production systems where sensitive data could be exposed.
+
+### Policy file security
+
+Policy settings files should be:
+
+- Writable only by administrators
+- Readable by all users who need to run DSC
+- Protected from unauthorized modification
+
+The default policy file locations provide this security model, but verify permissions match your
+organization's security requirements.
+
+## Related content
+
+- [DSC Configuration document overview][01]
+- [DSC Resource anatomy][02]
+- [Improve the accessibility of DSC output in PowerShell][03]
+
+<!-- Link reference definitions -->
+[01]: ./configuration-documents/overview.md
+[02]: ./resources/anatomy.md
+[03]: ./output-accessibility.md