The Models project is used to define the Database Entities for the Database project, these should not be confused with the Domain Entities. The Models project is tightly coupled to the Database project and the models should not be used outside of the Database project.
For the most part the models are a 1:1 mapping of the Database tables, however there are some exceptions to this rule. Ideally in typical DDD fashion the Domain Entities would be mapped to the Database Models via the use of Aggregate Roots, Data Transfer Objects, Repositories etc.
Your classes and other objects defined in the Models project should be defined in the
Models namespace, and this namespace should never be used directly withing the API Project. For the most part the Models project should be considered an internal and the Domain and Database Project should only be able to reference it.