Start a new Forms application and fill in the above code in the Forms.cs file.
If after startup you drag one of the labels the text of the labels will be copied to the textbox.

using System;
using System.Collections.Generic;
using System.ComponentModel;
using System.Data;
using System.Drawing;
using System.Linq;
using System.Text;
using System.Windows.Forms;

namespace DragDrop
{
    public partial class Form1 : Form
    {
        private Label label1;
        private Label label2;
        private Label label3;
        private TextBox dropTxb;

        public Form1()
        {          
            // Init the form.
            InitializeComponent();

            // Install our controls.
            label1 = new Label();
            label2 = new Label();
            label3 = new Label();
            dropTxb = new TextBox();

            // Place 3 labels
            label1.Location = new Point(100, 30);
            label1.Text = "One";
            label2.Location = new Point(100, 60);
            label2.Text = "Two";
            label3.Location = new Point(100, 90);
            label3.Text = "Three";

            // and a textbox on the form.
            dropTxb.Location = new Point(100, 180);
            this.dropTxb.Size = new Size(100, 20);
            dropTxb.AllowDrop = true; //essential

            // Handle mousedowns of all the labels with the same method.
            label1.MouseDown += new MouseEventHandler(labelMouseDown);
            label2.MouseDown += new MouseEventHandler(labelMouseDown);
            label3.MouseDown += new MouseEventHandler(labelMouseDown);

            // Install two drageventhandlers for our textbox.
            dropTxb.DragEnter += new DragEventHandler(this.dropTxb_DragEnter);
            dropTxb.DragDrop += new DragEventHandler(dropTxb_DragDrop);            
           
            // Add our controls to the controls collection of the form.
            this.Controls.Add(label1);
            this.Controls.Add(label2);
            this.Controls.Add(label3);
            this.Controls.Add(dropTxb);
        }

        void labelMouseDown(object sender, MouseEventArgs e)
        {
            // We know sender is a label find out which.
            Label Lbl = sender as Label;
            // Get the label text and start the whole thing up.
            Lbl.DoDragDrop(Lbl.Text, DragDropEffects.Copy);
        }

        private void dropTxb_DragEnter(object sender, DragEventArgs e)
        {
            // Check if the data we are dragging is text.
            // Data gets the IDataObject that contains the data associated with the dragevent.
            if (e.Data.GetDataPresent("Text"))
            {
                e.Effect = DragDropEffects.Copy;
            }
            else
            {
                e.Effect = DragDropEffects.None;
            }
        }

        private void dropTxb_DragDrop(object sender, DragEventArgs e)
        {
            // Get the textdata object and cast to string
            // Data gets the IDataObject that contains the data associated with the dragevent.
            dropTxb.Text = e.Data.GetData(DataFormats.Text) as String;
            // Show we were here
            // Had to do this for Momerath and Mitja LOL
            StringBuilder sb = new StringBuilder();
            sb.Append("The text ");
            sb.Append("\"");
            sb.Append(dropTxb.Text);
            sb.Append("\"");
            sb.Append(" was dropped in the textbox.");
            MessageBox.Show(sb.ToString());
        } 
    }
}

What would be the point? Couldn't you just as easily on label click event do textbox1.text = label1.text? how about something that is not on the form that is being dragged into the control like a web image being dragged into a picturebox?

You got a point there.
But lately there has been a poster who had to drag and drop an operator between two textboxes to do a calculation.

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