This number is a server response code. There are several. The most used is '200 OK'. You never see this one, the browser knows the document is found and that he can display it. A simple 404 message would be enough, the browser knows it can display a not found error.
Most servers do send an alternative html document however.
This is where the third argument comes in. This tells the server to display the file 'notfound.html' in the web root of your site. The same directory where your home page 'index.html' is found. If you would create more error documents, you could put them in a seperate directory, like 'errors', or 'errordocuments'. The error document itself needs some attention too.