C code--------------------------

typedef struct test {
DWORD x;
DWORD y;
} mytest;

TestFunction(&mytest);

x should = 1
y should = 2

ASM code--------------------------

TestFunction:

  push  ebp
  mov   ebp,esp
  
  mov   dword [ebp+4],1
  mov   dword [ebp+8],2
  pop    ebp
  retn
    

format PE GUI 4.0 DLL
entry DllEntryPoint

include 'win32a.inc'

struct test
  x dd ?
  y dd ?
ends

section '.code' code readable executable

proc DllEntryPoint hinstDLL,fdwReason,lpvReserved
        mov     eax,TRUE
        ret
endp



; VOID TestFunction(test *pTest);
proc TestFunction pTest
  ;push ebp/mov  ebp, esp

  mov eax, [pTest] ; mov eax, [ebp+8] (Loads structure pointer into EAX)

; Now we write to the structure pointed by EAX
  mov [eax+test.x], 1
  mov [eax+test.y], 2

  ret ;leave/retn
endp

section '.edata' export data readable

  export 'TEST.DLL',\
         TestFunction,'TestFunction'

section '.reloc' fixups data discardable    

format PE DLL
entry DllEntryPoint

section '.code' code readable executable

  DllEntryPoint:

    mov   eax,1
    ret

  ; void TestFunction (test *pTest)
  TestFunction:

    mov   ebp, dword [esp+4]

    arg1 equ dword [0+ebp]
    arg2 equ dword [4+ebp]

    mov   arg1, 1
    mov   arg2, 2

    ret

section '.edata' export data    readable

  ; image export directory
  dd 0,0,0,RVA dll_name,0,1,1
  dd RVA addr_tab
  dd RVA name_tab
  dd RVA ordinal_tab

  ; dll name
  dll_name db 'test.dll',0

  ; function address table
  addr_tab dd RVA TestFunction

  ; function name table
  name_tab dd RVA ex_TestFunction

  ; export name table
  ex_TestFunction db 'TestFunction',0

  ; ordinal table
  ordinal_tab dw 0
    

The code you posted did not populate the structure that was passed to the test function

  ; void TestFunction (test *pTest) 
  TestFunction: 
    virtual at eax
      .x dd ?
      .y dd ?
    end virtual

    mov   eax, dword [esp+4]

    mov   [.x], 1 ; mov [eax], 1
    mov   [.y], 2 ; mov [eax+4], 2
; No need for "dword" since fasm obtains the data size from the labels

    ret
; Regs that must be keep its original value at return: EBX, ESP, ESI, EDI, EBP (At least for cdecl, stdcall, pascal and fastcall calling conventions)    

Code:

  ; void TestFunction (test *pTest)
  TestFunction:

    mov   ebp, dword [esp+4]

    arg1 equ dword [0+ebp]
    arg2 equ dword [4+ebp]

    mov   arg1, 1
    mov   arg2, 2

    ret
    

if procedure itself, then ret 4 i bet in dll stdcall procs should reside.