From what I remember, Dwarf Fortress was born out of an obsession for procedural fantasy world generation. Plate tectonics, extremely accurate weather modeling, in-depth socioeconomic simulations that give the world a life of it's own, extremely detailed life & death scenarios that play out in real time. It's awe inspiring.

As for your question, check here: http://dwarffortresswiki.org/index.php/List_of_Dwarf_Fortres...

I'm not sure if they've ever truly gone into detail regarding their methods, but they've done high-level overviews here and there that I've seen.