The Dirichlet-Neumann (DN) method has been extensively studied for linear partial differential equations, while little attention has been devoted to the nonlinear case. In this paper, we analyze the DN method both as a nonlinear iterative method and as a preconditioner for Newton's method. We discuss the nilpotent property and prove that under special conditions, there exists a relaxation parameter such that the DN method converges quadratically. We further prove that the convergence of Newton's method preconditioned by the DN method is independent of the relaxation parameter. Our numerical experiments further illustrate the mesh independent convergence of the DN method and compare it with other standard nonlinear preconditioners.