Virtual disk is device that appears in Windows as a regular disk. It does not represent any hardware but is created by special computer program that runs in Windows kernel mode (kernel driver). SecretDrive is using its own kernel driver to create and manage virtual disks. Virtual disk contents are located in the container
The container is a regular file located on the hard drive. It holds data to mount virtual disk. Container contents are encrypted so you need to enter a security password to mount virtual disk.
To strengthen container security you can use security key file. It can contain any data, for example it can be some text book, or any computer program like notepad, or music file. The only requirenment is its availability on the moment of container mounting.