Introduction To HWM
If you've ever made a short in SFM or played around with the TF crew in Garry's Mod, chances are you've seen character models with the prefix HWM. HWM stands for Valve's Hardware Morph system. This is the main system used by Valve for the movies made in the Source Filmmaker, which give high-end controls to the animator for facial animation. These are meant to be used mostly for movies, as they are very costly and contain over 50 controllers on most faces, with a ton of underlying programming for the controls.
The DMX Format
DMX, built off of the SMD, is the current model format used to create models for the Source Engine. Currently, plugins are available for both Maya (supported officially) and Blender (third-party). DMX stores flex data, much like a .vta, however you can keep them all in the same file using the blendshape node. That's why it's used by Valve for character authoring now. HWM can only work using the DMX through DMXEdit. DMX supports 128 flex controllers and an unknown (but much higher) number of shapes. TF2's HWM ("hardware morph") models use a standard set of 50 shapes and 35 controllers and about 100 corrective shapes.