Team Foundation Server (TFS) is a tool created by Microsoft for managing project teams and workflows. It provides capabilities for project management, reporting, requirements gathering, and testing. TFS uses Git for source code control and is the backend system, providing processes, integration, and delivery of value to end users. It offers different templates like Scrum, Agile, and CMMI to support various development methodologies. Teams can define backlogs, user stories, tasks and track their status using TFS to manage work in an agile framework.