What does the command CD do?

CD stands for "change directory".

For instance, if you are in the directory of c:\files\ and you want to navigate to a folder within the "files" directory called "documents", you can type "cd documents" to change the directory you are in. Once you've done that you will be at c:\files\documents\. Inversely you can use "cd.." to go back to the parent directory "files".