Adobe points out that DNG files are smaller. For my CR2 files that I tried (from a Canon 70D), that is indeed the case and the originals are >14% larger than the converted. (Later, I found that the Sony Alpha-6000 files are smaller and converting to DNG produces larger files.)
How do they manage that? Why can't cameras make their files smaller too?
You don't say which camera(s) you're using for the original RAW files, but in general when creating a DNG file on your computer, you've got the enormous processing power of your computer which can be used to drive the most sophisticated compression algorithms around. Compare this with your camera, which has much less processing power and can therefore use only a simple compression algorithm, if any. For instance, Canon RAW files seem to use some form of simple Huffman code (based on analysis of the DCRaw source) and older Pentax cameras produced uncompressed DNGs.
Or put another way: the difference isn't "RAW" vs DNG (RAW in quotes because it's a concept rather than a format), it's "file produced on your camera" vs "file produced on your computer".
