This paper presents a review on a displacement-based method of structural analysis. In Applied Element Method (AEM), the structure is simulated as an assembly of elements formed by dividing the structure virtually. These elements are connected in both normal and tangential directions by springs. AEM can be used to analyze structural behavior from the initial loading until total collapse. It combines between the advantages of Finite Element Method (FEM) and Discrete Element Method (DEM). In this paper, the differences between AEM and the other numerical methods are discussed. Next, basic introduction to AEM and its assumptions are presented. The element formulation and the effect of number of the connecting springs between elements in addition to the element size are illustrated. Finally, applications of AEM such as cyclic loading condition, dynamic small and large deformation range, creep theory, functionally graded material, masonry building and fiber reinforced polymer and polypropylene composite are explained.