Plain English Meaning
It is a magnetic compass that does not sit on the dashboard. A small sensor is mounted out in the wingtip or tail, where the aircraft's own electrical and metal interference is lowest. That sensor picks up the Earth's magnetic field and sends the heading to a display in front of the pilot, giving a steadier and more accurate reading than the bobbing compass on the windscreen.
Full Definition
An electrically driven heading reference system that senses the horizontal component of the Earth's magnetic field using a fixed, pendulously mounted sensor (the flux valve) located in a wingtip or vertical stabilizer where is minimized. The sensor detects the direction of passing through its segmented and transmits this information electrically to a indicator in the , providing a stable that is largely free from the and that affect a traditional liquid-filled magnetic compass.