The DString (formally, a Tcl_DString) is a data type defined in the Tcl C library. It is similar to a C string, but it can dynamically (hence the D) grow to be as large as it needs to be. Using DStrings thus avoids a lot of risks for buffer overflow that plauge many "ordinary" C programs.
[Guess by a newcomener: DStrings used to be the main workhorses in Tcl before the introduction of Tcl_Objs, and thus have a bunch of features for constructing DStrings with list structure. These features are not so interesting now, but DStrings remain useful for constructing complex strings of other sorts (e.g. error messages).]
DKF: They're good for things like temporary buffers, and are used in quite a lot of places in the Tcl core still. The list-related stuff is rare though; that's usually done with Tcl_Obj-based list routines nowadays.