A Document Type Definition (DTD) is a type of schema. The purpose of DTDs is to provide a framework for validating XML documents. By defining a structure that XML documents must conform to, DTDs allow different organizations to create shareable data files.
Imagine, for example, a company that creates technical courseware and sells it to technical training companies. Those companies may want to display the outlines for that courseware on their websites, but they do not want to display it in the same way as every other company who buys the courseware. By providing the course outlines in a predefined XML format, the courseware vendor makes it possible for the training companies to write programs to read those XML files and transform them into HTML pages with their own formatting styles (perhaps using XSLT or CSS). If the XML files had no predefined structure, it would be very difficult to write such programs.