FLAC stands for Free Lossless Audio Codec, an audio format similar to MP3, but lossless, meaning that audio is compressed in FLAC without any loss in quality. This is similar to how Zip works, except with FLAC you will get much better compression because it is designed specifically for audio.
FLAC is a free lossless audio format. It differs from MP3, WMA, MP4 and other formats with lossy compression because it does not cause quality loss. However, the compression ratio is lower.