Desiccated coconut is a dried, grated, and unsweetened form of coconut meat. It is made by removing the moisture from fresh coconut meat and then grating or shredding it into small, fine pieces. The easiest way to make your own is to start with unsweetened coconut from the store. By adding the coconut milk in this recipe and toasting it on the stove, you are adding the moisture of fresh coconut and then drying it out and toasting it on the stove. Next, you pulvarize it in the blender to get that very fine texture.
Alternatively you can buy fresh grated coconut or frozen from South Asian stores and then toast it. I do not have easy access to fresh grated coconut. Since I wanted this recipe to be as easy as possible, using the store bought unsweetened coconut is the way to go.