From Scriptionary.com

Direct3D is an Application Programming Interface (API) for graphics programming and is a component of the DirectX API. Direct3D and its parent container, DirectX, are Microsoft Platform-specific, supported on Windows Platforms and the Xbox line of video game consoles. Direct3D handles both 2D and 3D graphics after taking over the deprecated DirectDraw API. Direct3D is mostly used for video game development, although lately several professional graphics applications have included support for Direct3D.

Direct3D is a hardware interface, which means that hardware functionality is made accessible through its API. If hardware support is not available, a substitute Reference Device is available which emulates the functionality of the required hardware through the main Processor. This option is generally not used since it is too slow for production quality applications.

The API was initially deemed a unwanted by the brunt of the user-community, but despite criticism Microsoft continued to improve Direct3D rather than adopting the popular OpenGL® API as its official rendering API. Ever since Direct3D version 8, many issues were resolved and presently the Direct3D API is extremely popular in the game development industry.