Disability adjusted life years (DALYs) are the sum of the present value of future years of lifetime lost through premature mortality, and the present value of years of future lifetime adjusted for the average severity (frequency and intensity) of any mental or physical disability caused by a disease or injury. They have been used as an outcome indicator in micro economic evaluations as well as sectoral prioritization exercises using league tables of cost-effectiveness. However, many of the current analyses are not comparable or transferable because either the assumptions used differ or are unclear, and because results are not presented in a way that allows researchers or policy-makers to re-calculate and re-interpret findings for use in an alternative context. However, at times there have also been miscalculations. This may happen either because evaluators disagree with the assumptions behind DALYs or because the methods of calculation have not been set out clearly. This paper shows how to calculate DALYs for cost-effectiveness analysis using a worked example. It also shows the impact of changing the age weighting and discount rates on estimates of cost-effectiveness, and suggests a set of minimum reporting criteria for using DALYs in cost-effectiveness analysis. Finally, readers are introduced briefly to a selected literature arguing for and against the use of DALYs.