How/When can we use this ability?!
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You have to tell us more then that.
Display Name is a field that to be displayed Instead of username around your forum. (and you just use username for login)
It is a famous ability in most CMSes ....
It is popular in MyBB too...
For example you can search "display name" in his forum!
and see here:
http://ideas.mybboard.net/idea/display-name
But I can not understand why this possibility does not exist on MyBB!
I agree, This idea is good.