Plain English Meaning
A setting on the navigation unit that tells it to give you guidance to a custom point you've created, instead of to the VOR ground station itself.
Full Definition
An operating mode of a VOR/DME RNAV system in which the unit calculates and displays course guidance to a pilot-defined waypoint rather than to the underlying VOR station. In this mode, course deviation, distance, and to/from indications are referenced to the waypoint, allowing the aircraft to fly a direct track to a point in space defined by a bearing and distance from a VORTAC.
Context Anchor
Seen when using VOR/DME RNAV equipment or navigation receiver in , especially when changing between direct guidance and waypoint-based guidance.