It doesn't track plays at all, it takes songs in your playlists and calculates close matches based on songs in other users playlists.
It's a relatively simple graph-transform that is just using occurence in playlists tor generation. Which makes adding the playlists self-reinforcing, which could have negative situations.
I have a wide range of musical taste, but a low number of playlists and can drastically change from metal to dance to hip-hop by adding a prebuilt playlist week to week.
Here is an article on how it works, and there have been discussions from the staff elsewhere on why DW is so good.
http://qz.com/571007/the-magic-that-makes-spotifys-discover-...