Direct read
Direct-read formats enable you to work with nonnative datasets directly in ArcGIS for Desktop without using any intermediate format or conversion tool. They are translated on the fly as read-only datasets and displayed in memory while the source file remains on disk in its native format.
Some direct-read formats may require an interoperability connection in order to appear in the Catalog tree. This is determined by several factors, such as the predictability of the file extension or whether it conflicts with another format already registered on your system.
Usage
When you add direct-read formats to ArcMap, ArcScene, or ArcGlobe, all standard map functions are enabled, including attribute tables and labeling functions. You can snap to geometry, substitute symbology, and use supported formats with all geoprocessing tools that accept feature classes or layers as input.
To edit the data, you must convert it to a geodatabase format using the Quick Import tool or a spatial ETL tool.