This is the Document Type Definition that should be the beginning of any HTML document. Generally, there is Transitional, Frameset and Strict.
The declaration (technically it's not a "tag") should be the very first thing in your document... if you choose to use it at all. tells the browser what version of HTML you are writing in.
More specifically, declares that this document conforms to a specific version of HTML, and specifies what version that is.
That's the DocType for HTML 4.01. It is normally used at the very beginning of an HTML 4.01 document to tell the browser what version of HTML it should use to render the page.