Stands for "Dots Per Inch." DPI is used to measure the resolution of an image both on screen and in print. As the name suggests, the DPI measures how many dots fit into a linear inch. Therefore, the higher the DPI, the more detail can be shown in an image.
It should be noted that DPI is not dots per square inch. Since a 600 dpi printer can print 600 dots both horizontally and vertically per inch, it actually prints 360,000 (600 x 600) dots per square inch.
Also, since most monitors have a native resolution of 72 or 96 pixels per inch, they cannot display a 300 dpi image in actual size. Instead, when viewed at 100%, the image will look much larger than the print version because the pixels on the screen take up more space than the dots on the paper.