1. When plot points in a story arc are all connected in a way that makes sense.
2. When a character acts consistently throughout the duration of a story.
3. When elements of a film/TV show fit seamlessly with the situation (See. Apocalypse Now helicopters, Torture scene in Reservoir Dogs)
Also Dramatically Incorrect, where everything is the opposite (See. Most of the music bits in Watchmen).
Pretty much any M. Night Shyamalan is NOT dramatically correct.
'You can't just put that twist there, it's not dramatically correct'
'Just finished my script, better check it for dramatical correctness'
'Man, that film was SOOOO dramatically correct I would want ever my worse enemy to see it'