In case you're not sure about what Brian just wrote, here's a little more detailed info...
Like Brian said, it's an ADC (Analog-to-Digital Converter). It takes the analog signal from a pre-amp, and converts it to a digital signal, which is then recorded by the DAT deck (or whatever digital recorder you are using). People like to use external, stand-alone ADC's because, generally speaking, they are higher quality than the ADC contained within the DAT deck.