Docker Compose is a powerful tool that simplifies the management of multi-container applications by allowing developers to define and run complex applications using a single configuration file. It supports out-of-the-box use with Daytona workspaces, as well as customizable environments through dev containers. Dev containers provide additional control over specific versions or technologies in the workspace, eliminating the "works on my machine" problem. Docker Compose can be used in conjunction with lifecycle scripts to automate tasks and enhance the developer experience. By combining Docker Compose with Daytona, developers can streamline their development workflow, ensure consistency across different environments, and easily collaborate with their team.