Hello Malayils,
In a way, databases are nothing than a collection of files.
The collection of databases in an instance is grouped under DB2/NODE0000, with the specific databases grouped as:
DB2/NODE0000/SQL00001,
DB2/NODE0000/SQL00002,
.....................
Of course each database-node contains a tree-structure of itself with tablespaces,logfiles,events etc.
At the bottem of this tree-structure are files that constitute the actual tables e.d. that reside in the database