1) "What are the technical limitations of DCs?" >> BIP300 is a soft fork to enable a simple opcode, OP_DRIVECHAIN on bitcoin core so sidechain users can withdraw their L2 BTC back to L1 BTC. Technical limitations are really unlimited. Devs can clone any altcoin into a bitcoin sidechain without any shitcoin. Devs can build whatever they want, if its useful/highly demand feature then users will come. e.g. a privacy focused end-2-end encrypted bitcoin sidechain/L2. A limitation would be that it takes 3-6 months to withdraw your BTC back to L1. However, its likely the average joe user will just use swap markets on exchanges instead as its more convenient for them. 2) "Are we able to have an infiinite amount of side chains derived from DCs?" >> BIP300 pull request has put a limit of 256 sidechain slots approval depends on bitcoin miners. It's unlikely that devs will use up all these sidechain slots but in such a scenario, devs can create a sidechains of sidechains without changing bitcoin core like a layer 3.