The loot system in DD2 is absurdly convoluted, in fact every system in DD2 is terrible
I love this game. It's one of the rare couch co ops that both me and my GF can play together. But it took us soooo long to get a basic understanding of how characters level and how your are supposed to upgrade gear.
Not only is it extremely unintuitive, but the game does nothing to help you understand it!