A device that runs on AC current it's voltage inside is measured by always turning the multimeter's knob to AC voltage:same for DC right?
You turn the knob to AC voltage when you want to measure a AC voltage, or the AC component of a voltage.  You turn the knob to DC voltage when you want to measure DC voltage.  "Wall" power will be AC, but inside a device this AC is usually converted to DC, which then actually powers the device.

Most of the time, AC is for measuring wall power and related, and DC is for measuring stuff like batteries or the power actually running circuits inside some device.

However, it seems your real confusion is between AC and DC voltage.  Surely there is a lot about that already out there.  Once you understand that, it will be obvious what to tell the meter to measure.