Hi Ashok,
This gives a better explanations
SAP System= Dialog Instance + Central Instance + Database Instance.
Dialog Instance:- Dialog instance exists in the application layer.Its purpose is to maintain load on the server.Dialog instance exists on different host.If number of dialog instance increases hardware resources,dispatcher,workprocesses also increases so that more number of users can login at a time.
Central Instance:- Central instance can also work as dialog instance.But the main thing is that it contains Enqueue and message servers. All dialog instances communicate with central instance before requesting database with message server. When an instance is started, the dispatcher process attempts to establish a connection to the message server so that it can announce the services it provides (DIA, BTC, SPO, UPD, etc.).Lock table is managed in central instance by enqueue service.
Database Instance:- As normal database instance accepts requests from central instance to fulfill the user's requests. As lock management system provided by enqueue server it will provide service to users.
regards
kartik