Bethesda Softworks made a great work creating games that you can modify by a tool like the Construction Set/Creation Kit, but for some type of changes, it is not enough. So, TES Reloaded is not an .esp/.esm mod but a .dll plugin. It works directly on the game executable; when the game is loaded, the dll is injected into the game by the OBSE/SKSE. This allows to "hack" the code at runtime (so maintaining the copyright because TESR changes NOTHING of the original executable).
Then, TESR is very "special", because it works directly on the game engine and its code, without using standalone additions. It is like an official patch, but the game is patched without having the source code. TESR extends/implements the graphics engine without hooking the DirectX device, but working directly on GameBryo/Creation engine. This allows great performance, high compatibility and it is able to use all the features from the .esp/.esm mods. So, if (for example) a mod changes the weather, TESR "reflects" that changes into the water, precipitations etc....like the original game engine does.