Direct3D is an application programming interface (API) included with the Microsoft DirectX package, competing with the OpenGL standard. It is used to render three dimensional graphics in applications that require it on the Microsoft Windows operating system and also used with the Xbox and Xbox 360 gaming platforms for 3D rendering. When available, Direct3D will employ full or partial hardware acceleration to drive rendering performance when required. It supports advanced graphics capabilities in hardware including Z-buffering, Anti-Aliasing, Atmospheric Effects etc. While it is designed with 3D rendering commands, Direct3D has replaced DirectDraw as well for rendering of 2D graphics since DirectX 8.
It is constantly updated as Graphics Cards and chipset hardware continue to evolve to offer even more powerful rendering and features for graphics. It's software emulation features include full vortex software emulation, but Direct3D cannot emulate pixel shader features if it is not supported by the graphics hardware on the system.
Other DirectX related glossary:
DirectX Media Objects