Drag-and-drop security

Hi group!
In terms of security, how does drag-and-drop function in windows? Is the
clipboard involved? would a keylogger be able to record this? Pretty
technical, too far above my head!

To be more specific, I am setting up a password manager (Open source
Keepass) that allows one to drag-and-drop encrypted passwords at the
sites you have subscriptions to. This would seem to be secure. Any
thoughts from people who are knowledgeable?

Dave T.