How to do drag drop

It depends what you are dragging, but...
It's a two stage process: you need to enable drop in the destination form (this uses files)
1) Set the AllowDrop property of your form to True
2) Create a handler for both the DragEnter and DragDrop events of your form.
3) In the DragEnter handler, add the following line of code:

e.Effect = DragDropEffects.Move;

4) In the DragDrop handler, add the following:

string[] files = (string[]) e.Data.GetData(DataFormats.FileDrop);
if (files != null)
    {
    foreach (string file in files)
        {
        Console.WriteLine(file); // Or whatever you need to do...
        }
    }

In your source form, it's a little more complex, as you need to use a control that supports dragging, such as the ListView.
1) Handle the controls ItemDrag event. In this case, a ListView:

private void myListView_ItemDrag(object sender, ItemDragEventArgs e)
    {
    StringCollection s = new StringCollection();
    s.Add(@"D:\Test Data\MyPic.jpg");
    DataObject obj = new DataObject();
    obj.SetFileDropList(s);
    myListView.DoDragDrop(obj, DragDropEffects.Copy);
    }

2) That's it!