DFU stands for Device Firmware Update. You can put your iPhone into DFU mode to make modifications to your iPhone’s software.
DFU mode is distinct from Recovery Mode, which you can use to restore your iPhone’s settings, fix freezing and rebooting issues, or upgrade to the latest iOS. DFU mode allows you to do these things, too, alongside more advanced actions, such as downgrading your iPhone or unlocking your SIM.