Installing ePDM for the first time, and on page 18 of the install guide it has an optional step.

Database Engine Configuratio/Data Directories tab - (Optional) To chane the default folder where databases created by Enterprise PDM are stored, change the location for User database directory and User database log directory.

What exactly is this refering to?

Is this where the CAD files are going to reside, or simply the database?

Sever 2008 R2, SQL, and the ePDM software will be installed on "C"

Our data is going to end up on a seperate partition "D"