Dtail’s damage is easiest to understand if you think of it as being in two parts, the release damage and the area of effect damage. The release damage is physical and is figured with the kick damage equation above. The area of effect damage is figured based off of the release damage. Take the physical release damage, multiply it by the Dtail bonus, and convert it into fire to get the aoe damage. This is why Dtail is ineffective when released on a physical immune enemy. No release damage is actually done, therefore no damage is available to be multiplied and converted.
TS is almost always used with Dtail. The TS bonus increases the physical damage done when releasing with Dtail and so greatly increases the damage available to be multiplied and converted.
When viewing Dtail damage on the character screen the damage shown is the sum of the release damage and the AoE damage. To find the damage done in the AoE alone, subtract the damage done by the release strike from what is shown.
Fists of Fire has a property in 1.10 that is worth mentioning in connection with Dtail. FoF now converts 3% of your physical damage to fire for every level of FoF. This conversion happens before Dtail figures its aoe damage and will reduce the physical damage done by the release thus reducing the damage done in Dtail’s aoe. FoF at level 34 and above will leave no damage done in the Dtail aoe. Using FoF and Dtail at the same time is really not recommended unless the aim is to kill a non-fire immune, physical immune enemy that Dtail itself cannot harm.