The duplicate finder works by identifying exact matches of the actual audio in audio files. It ignores id3 tags and filenames, and matches the exact audio.
When you click Resolve Duplicates in the app, you'll see a list of all the matches, and a button to open the files in Finder or Windows Explorer. From there, you can delete the duplicate from your hard drive, then delete it from My DJ Cloud.
We'll be expanding on the feature in the near future to make it easier to use, and more customizable.