We develop a basic theory for divisible design graphs with possible selfloops (LDDG's), and describe two infinite families of such graphs, some members of which are also classical examples of divisible design graphs without loops (DDG's). Among the described theoretical results is a discussion of the spectrum, a classification of all examples satisfying certain parameter restrictions or having at most three eigenvalues, a discussion of the structure of the improper and the disconnected examples, and a procedure called dual Seidel switching which allows to construct new examples of LDDG's from others.