Damage Reduction
Damage Reduction is a measure of ability to reduce damage caused by some attack or activity. It is effectively an armour bonus of a specific sort.
Damage reduction will not reduce the damage dealt in an attack by a value greater than the base attack bonus of the weapon used.
If a character attacks another with a sword and the total result of the relevant dice rolls and bonuses is 20, and the defender makes his defense rolls for a total of 10. Then theoretically, 10 damage is dealt. But a successful baseline sword strike deals 7 damage (not taking the wielders' contribution to the attack attempt into account). If the defender has a damage reduction of 2, then the sword dealt only 5 damage, and the total attack is less successful.