Players A and B are guildies, C is a pug. All three of them play as a marksmanship hunter, and DBVV drops. Naturally, all three of them roll for that item.
Player A /rolls 99.
Player B /rolls 33.
Player C /rolls 66.
So, the trinket is won by player A, and
under normal circumstances it should be given to him. However, here's where the guild's loot system kicks in. Even though player B rolled the lowest, both he and his guildie are equally qualified to spend their DKP and compete for the item. Let's say that Player B has more points than his guildie, or that player A prefers to spend his points elsewhere. In that case, player B is allowed to claim the juicy reward. This scenario might seem unfair to player C, but he shouldn't forget that under normal circumstances (i.e. /rolling for items) player A would still say YES to the upgrade, and he wouldn't give it to anyone else. But since he has joined a guild with specific loot policies, he is expected to follow them, else he risks losing his membership.