The Kafka Streams DSL introduces optimization techniques to improve efficiency in stream processing applications. The framework generates a logical plan before compiling it into a physical plan, allowing for optimizations such as reducing unnecessary repartition topics and state store footprints. The `StreamsConfig.TOPOLOGY_OPTIMIZATION` configuration can be set to enable topology optimization, which is enabled by default in newer versions of Kafka Streams. This feature aims to improve performance and reduce resource usage in stream processing applications.