While retaining socialism as a long-term goal, social democracy is distinguished from some modern forms of democratic socialism for seeking to humanize capitalism and create the conditions for it to lead to greater democratic, egalitarian, and solidaristic outcomes... It has been described as the most common form of Western or modern socialism,[6] as well as the reformist wing of democratic socialism. ( ref )

Social democracy is, by definition, geared towards socialism while still acting within capitalism to better society by pushing for direct action against inequality. The way a lot of socdems see it, the difference between them and demsocs is that demsocs tend to be neutral (or even negative) on steps that better overall quality-of-life that involve working within the capital system. For example, a socdem would embrace public option, or growing medicare as a good thing in the US because it's better than what we have. A demsoc **might ** not because it is not actually taking a concrete step towards nationalizing healthcare.

Categorizing is hard because different people think different things of different terms, but it is unfair to categorically call socdems "liberal" in the "free enterprise" sense.