DSD (Direct Stream Digital) is a technology developed by Sony and Philips. It is a departure from normal PCM digital audio which allows an enormous jump in quality from the normal 44.1 kHz to 192 kHz universe.
In practical terms, DSD allows users of Pyramix to make recordings that truly mimic those using the best analogue gear without any of the limitations associated with using 'linear' equipment. DSD uses a method of encoding an analogue audio signal using PDM (Pulse Density Modulation) which means that the effective samplerate of a DSD256 signal becomes 11.2 MHz, which is 256 times higher than the one used by CD (44.1 kHz).
If you look around, you will notice that more and more recordings are appearing that use DSD technology. What was once simply a technology solely for SACD production is now becoming a sought after samplerate for productions where the end product is a CD or downloadable master. Engineers around the world are realizing that being able to record using DSD means the end product, regardless of its final resolution, will sound closer to reality than was ever possible before.
Check out the DSD Wikipedia page