A sequestered disc is when a herniated disc material breaks into fragments. Normally, the inner jelly like material (ie. Nucleus pulposus), stays together when it herniates out. However, sometimes, the herniated material breaks off into little fragments or pieces.
This is important because a sequestered disc herniation has a much better change of resolving on its own without the need for surgery. The reason for this is that when the disc is altogether, that chances of the body absorbing it and removing it is less than if it was already fragmented. Just like when you cut a piece of steak into several small pieces.