Skeletal animation isn't really as amazing as people seem to think it is. Well, actually, it is pretty amazing, but it just got overhyped for Half-Life. (Other games had it before HL.)
If you notice, there aren't any detachable limbs in HL either. Doing so with the way skeletal animation basically works would simply warp the mesh so that it would look like your arms suddenly stretches all the way to the ground like it was made of silly putty.
That said, yes, I'm pretty sure Ahnteis is right about skeletal animation being included. Otherwise it'd be fairly hard to use the same set of animations for various swords, and another set for bows, etc.
I'm not sure exactly how DS stores the animations though. Either it can take the bones and movement data seperately from the model out of Character Studio, or... something else....

I guess it's possible that the bones/movement data has to be included from a Character Studio file for every model as it's being made, but I doubt that's the case.
If any of this sounds like BS, that's because I would only rely on it being 50% accurate myself, since I'm not incredibly knowledgable in CS and skeletal animation systems.