Downloadable content, or DLC, is a form of added content released to support a game. Typically this means mission packs, levels, extra items, avatar customisations or additional modes. Downloadable content may either be free or paid depending on the game. Angry Birds, for example, frequently updates with extra levels for free, while console games often release DLC as a paid upgrade as a part of their business model.
Downloadable content is not the same thing as freemium content. In the former the game is paid-for and the content tends to be delivered in packs. In the latter the basic game is free, but one or more currencies within the game can be purchased and put to a wide variety of uses.