Research the DC universe. Look at the different heroes such as Superman and Green Arrow along with villains ranging from Captain Boomerang to Darkseid. The more knowledge you have on the universe, the easier it will be to fit your own character in.
Determine if you are creating a hero or villain. You can also choose to create an anti-hero such as Lobo or Amanda Waller, someone whose motives are not always known.
Choose the powers for your character. Like Dr. Fate and Zatanna, your character can be versed in magic or have super strength like Wonder Woman. Your character may be a human, such as the members of the Bat-family who rely on training to stay fit for battle.
Create an origin story for your character. Your character may be an alien from another planet or a refugee from Apokalips. DC origins tilt toward magic and aliens while Marvel origins sway toward science experiments and genetics. There are exceptions in both universes, so your character can have any origin you create.
Give your character a name, both in-costume and an alias. Alias names can be alliterative like Clark Kent and Wally West while in-costume names should describe your character's powers much like The Flash and Poison Ivy have descriptive names.
Sketch an image of your character. Use pencil and paper to freehand your design or use online programs such as Hero Machine or the character creation engine in "City of Heroes" for design ideas. Add color to your costume reflective of his powers and alignment.