The fixed dividend rate is set at inception so that the swap has zero value to the buyer. At maturity, the buyer receives or pays the difference between the realized dividends and the fixed dividend rate1.
Consider a hypothetical example in which the fixed dividend rate is 20 points. If the realized dividends are 24 points, the buyer gains 4 points and the seller loses 4 points. If the realized dividends are 14 points, the buyer loses 6 points and the seller gains 6 points.
Unlike an exchange-traded dividend future, a dividend swap is not marked to market daily in the model. If interest rates and dividends are dependent, its price therefore differs from that of a dividend future for the same period. The article "Dividend Swaps and Futures" explains this in detail.
Notes
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Damir Filipović and Sander Willems, "A Term Structure Model for Dividends and Interest Rates" (arXiv:1803.02249 v3, May 23, 2020), section 6.2 "Dividend forwards", page 20. ↩