Di's collar is seen in the following condition:

After the bullet has perforated the skin, the elasticity of the skin causes the skin defect to contract. The skin is abraded (abrasion collar) around the hole due to rubbing of the gyrating body of the bullet against the inveed epidermis and heat of the bullet. A black coloured ring "grease or di collar" (bullet wipe soiling) is seen as narrow ring of skin, lining the defect, and is sharply outlined. This is caused from the removal of substances from the bullet as it passes through the skin. It is more marked in a distant shot. Ref: The Essentials of Forensic Medicine and Toxicology by K S Narayan Reddy, 27th edition, Page 196.