A numerical technique is described for the analysis of multiple interacting deformable bodies undergoing large displacements and rotations. Each body is considered an individual discrete unit, which is idealized by a finite element model. Discrete finite element models interact with their surroundings through contact stresses, which are continually updated as the elements move and deform. The method of analysis consists of a finite element formulation based on a generalized explicit updated Lagrangian method. This formulation is a general finite element formulation, that permits the large deformation analysis of both continuum and discontinuum systems. Different validations of the proposed method of analysis, including cases that involve very large rotations, as well as some examples that demonstrate the application of the discrete finite element method to problems in rock mechanics are presented and discussed in the paper.