Short for “aileron differential”.  When ailerons are deployed, the up aileron “sees” less relative wind than the down aileron because the wing itself tends to block some of the incoming wind for the up aileron.  The result causes the up aileron to have less effect than the down aileron on rolling the airplane, AND the drag caused by the ailerons is greater on the side of the down aileron.  The net effect is greater yaw force on the side with the down aileron and more of a corkscrewing effect on the roll.

Aileron differential causes the down-going aileron to reduce it’s otherwise standard deflection so as to balance the aileron effect on the two wings.  For normal upright flight, the result is a more natural turn and a more axial roll.  Aileron differential is popular for sport flying and is almost essential for biplanes.  Differential is less popular for 3D and other flying styles that use a lot of inverted flying, because the correct differential for upright flight is backwards for inverted flight.  Differential applied during inverted flight exaggerates the unbalanced roll and yaw characteristics.

Aileron differential can be created by the design of the servo control linkage or by the set up in the transmitter using the ‘Diff’ field found in each Mixer line.  The DIFF weight entered applies to one side of the action and (100%-DIFF weight) on the other.  For example DIFF = 100% allows full movement to one side and 0% to the other side.