To set up a Daytona Enterprise Demo environment on DigitalOcean, first prepare your account by logging in, creating a droplet with recommended specifications (e.g., 4 vCPUs and 16 GB RAM for individual use), choosing Ubuntu 22.04 LTS, and ensuring a domain is hosted on DigitalOcean. Next, configure OAuth settings using GitHub or GitLab, then set up the environment by cloning the Daytona repository, installing dependencies like Helm and Certbot, and agreeing to terms of use. Configure DNS records and setup Acme challenge for TLS certificate validation, wait for DNS propagation, and finalize the installation by setting up a K3S cluster and Longhorn storage requirements. Finally, launch your Daytona instance, log in using GitHub OAuth, create a new workspace, and begin using Daytona within minutes. Post-installation tips include pre-building images and utilizing NVMe storage for faster performance.