Dark matter substructure and dwarf galactic satellites
  A decade ago cosmological simulations of increasingly higher resolution were
used to demonstrate that virialized regions of Cold Dark Matter (CDM) halos are
filled with a multitude of dense, gravitationally-bound clumps. These dark
matter subhalos are central regions of halos that survived strong gravitational
tidal forces and dynamical friction during the hierarchical sequence of merging
and accretion via which the CDM halos form. Comparisons with observations
revealed that there is a glaring discrepancy between abundance of subhalos and
luminous satellites of the Milky Way and Andromeda as a function of their
circular velocity or bound mass within a fixed aperture. This large
discrepancy, which became known as the ``substructure'' or the ``missing
satellites'' problem, begs for an explanation. In this paper I review the
progress made during the last several years both in quantifying the problem and
in exploring possible scenarios in which it could be accommodated and explained
in the context of galaxy formation in the framework of the CDM paradigm of
structure formation. In particular, I show that the observed luminosity
function, radial distribution, and the remarkable similarity of the inner
density profiles of luminous satellites can be understood within hierarchical
CDM framework using a simple model in which efficiency of star formation
monotonically decreases with decreasing virial mass satellites had before their
accretion without any actual sharp galaxy formation threshold.
