The centerpiece of EIGRP is the Diffusing Update Algorithm (DUAL), EIGRP's route-calculation engine. The full name of this technology is DUAL finite-state machine (FSM).

An FSM is an abstract machine, not a mechanical device with moving parts. FSMs define a set of possible states that something can go through, what events cause those states, and what events result from those states. Designers use FSMs to describe how a device, computer program, or routing algorithm will react to a set of input events. The DUAL FSM contains all the logic used to calculate and compare routes in an EIGRP network. DUAL tracks all the routes advertised by neighbors and uses the composite metric of each route to compare them. DUAL also guarantees that each path is loop-free. Lowest-cost paths are then inserted by the DUAL protocol into the routing table.

EIGRP keeps important route and topology information readily available, in a neighbor table and a topology table. These tables supply DUAL with comprehensive route information in case of network disruption. DUAL selects alternate routes quickly by using the information in these tables. If a link goes down, DUAL looks for a feasible successor in its neighbor and topology tables.

A successor is a neighboring router that is currently being used for packet forwarding; it provides the least-cost route to the destination and is not part of a routing loop. Feasible successors provide the next lowest-cost path without introducing routing loops. Feasible successor routes can be used in case the existing route fails. Packets to the destination network are immediately forwarded to the feasible successor, which at that point is promoted to the status of successor.