Each folder added to Sync receives a system .sync folder (hidden by default). It contains share identifier and other service files explained below. Having .sync in the folder is critical for syncing. Deleting .sync will result in "Service files missing" error.
This is the structure of a simple sync share
1. .sync folder (hidden by default).
2. .DS_Store (short for Desktop Services Store) is a hidden file created by OS X to store custom attributes of a folder such as the position of icons or the choice of a background image. (appears on OS X only).
3. The Archive folder stores old versions of files which were either deleted or modified on other devices in the course of syncing. Read more about Archive
4. ID file, the identifier of the folder. It lets Sync find the right peers and carry out syncing of the same folder added to Sync on other devices.
5. IgnoreList lets you specify which files should be excluded from syncing (more info here).
6. StreamsList is a file allowing you to "white list" alternate streams, xattrs and resource forks (more info here)
7. Files ending with .!sync - these are the files that are being synced at the moment. When download is complete, the file is renamed to its proper name and moved to its proper place.
8. User's files.