Quoting perldata:

The two control characters ^D and ^Z, and the tokens __END__ and __DATA__ may be used to indicate the logical end of the script before the actual end of file. Any following text is ignored.

Text after __DATA__ may be read via the filehandle PACKNAME::DATA, where PACKNAME is the package that was current when the __DATA__ token was encountered. The filehandle is left open pointing to the line after __DATA__. The program should close DATA when it is done reading from it. (Leaving it open leaks filehandles if the module is reloaded for any reason, so it's a safer practice to close it.) For compatibility with older scripts written before __DATA__ was introduced, __END__ behaves like __DATA__ in the top level script (but not in files loaded with require or do) and leaves the remaining contents of the file accessible via main::DATA.

See SelfLoader for more description of __DATA__, and an example of its use. Note that you cannot read from the DATA filehandle in a BEGIN block: the BEGIN block is executed as soon as it is seen (during compilation), at which point the corresponding __DATA__ (or __END__) token has not yet been seen.

Executive summary: it's a special filehandle that allows you to embed data in a Perl script itself, after a __DATA__ token indicating the end of the script proper.

In the above example, reading from DATA will successively read the lines "foo\n", "bar\n" and "quzX\n", exactly as if you'd opened a file containing them and read from the filehandle you'd got.