5'->3' DNA exonuclease which digests single-stranded DNA (ssDNA) (By similarity). Regulates inflammatory cytokine responses via the degradation of nucleic acids, by reducing the concentration of ssDNA able to stimulate TLR9, a nucleotide-sensing receptor in collaboration with PLD4 (By similarity). May be important in myotube formation. Plays a role in lysosomal homeostasis. Involved in the regulation of endosomal protein sorting (By similarity). Exonucleolytic cleavage in the 5'- to 3'-direction to yield nucleoside 3'-phosphates. Interacts with APP. Localizes to ER-associated vesicles in differentiating myotubes. The soluble form in lysosome arises by proteolytic processing of the membrane-bound form. N-glycosylated. Proteolytically processed to a soluble form that is stable within endosomes and lysosomes. During transport through the secretory pathway becomes proteolysed by cysteine proteases, thereby releasing a stable soluble lysosomal lumenal polypeptide, whereas the transmembrane-bound fragment is rapidly degraded. Its transport route to lysosomes involves ubiquitination and the ESCRT complex. Ubiquitinated. Ubiquitination mediates sorting into lysosomes. Belongs to the phospholipase D family. It was initially thought that PDL3 has phospholipase D activity due to its HKD motifs. The second HKD motif contains Glu instead of the canonical Asp. Its enzyme activity is therefore unsure. Catalytic phospholipase D activity is still controversial (By similarity). Its closest homolog PLD4, exhibits no phospholipase activity (By similarity).