The document discusses data flow diagrams (DFDs) and provides a step-by-step example of creating DFDs for a lemonade stand system. It explains that DFDs graphically show the flow of data through a system and can be used to visualize data processing. The example demonstrates creating a context-level DFD showing external entities, a level-0 DFD identifying key processes, and a level-1 DFD decomposing those processes and identifying data stores.