Sorry for the late response, I read the email notification of your post but forgot to reply. Anyway, here's a quick example function that takes input from Data and then fills it with a new value.
Code:
function Reverse(mWnd, aWnd: hWnd; Data, Parms: PChar; Show, NoPause: Boolean): Integer; stdcall;
var
  Temp: String;
  I: Integer;
begin
  SetLength(Temp, Length(Data));
  for I := 0 to Length(Data) do
  begin
    Temp[I] := Data[Length(Data)-I]; // Reversing string by retrieving characters from Data one at a time
  end;
  StrCopy(Data, PChar(Temp)); // Putting reversed string back into data
  Result := 3;
end;


Using $dll(something.dll, Reverse, hello there) would return ereht olleh

There's no direct way to pass more than one parameter to a DLL I'm afraid; the simplest way is to tokenize them somehow. For instance if you know the parameters won't have a semi-colon in them you can just use $dll(something.dll, SomeFunction, value1;value2;value3) and then parse Data inside the DLL.

Spelling mistakes, grammatical errors, and stupid comments are intentional.