Plays a role in the signal transduction pathways mediated by multiple Wnt genes. Participates both in canonical and non-canonical Wnt signaling by binding to the cytoplasmic C-terminus of frizzled family members and transducing the Wnt signal to down-stream effectors. Promotes internalization and degradation of frizzled proteins upon Wnt signaling. Interacts through its PDZ domain with the C-terminal regions of VANGL1 and VANGL2. Interacts with Rac. Interacts with ARRB1; the interaction is enhanced by phosphorylation of DVL1 (By similarity). Can form large oligomers (via DIX domain). Interacts (via DIX domain) with DIXDC1 (via DIX domain). Interacts (via DEP domain) with AP2M1 and the AP-2 complex (By similarity). Interacts with DACT1 and FAM105B/otulin. Interacts with DCDC2. Interacts (when phosphorylated) with FOXK1 and FOXK2; the interaction induces DVL2 nuclear translocation (PubMed:25805136). Interacts with MAPK15 (By similarity). Interacts with PKD1 (via extracellular domain) (PubMed:27214281). Interacts with LMBR1L (By similarity). Localizes at the cell membrane upon interaction with frizzled family members and promotes their internalization. Localizes to cytoplasmic puncta (By similarity). Interaction with FOXK1 and FOXK2 induces nuclear translocation (PubMed:25805136). The DIX domain mediates homooligomerization. Phosphorylated by CSNK1D (PubMed:21422228, PubMed:9192851). WNT3A induces DVL2 phosphorylation by CSNK1E and MARK kinases (PubMed:25805136). Belongs to the DSH family.