Days of stock is the amount of days you want to cover demand for when placing purchase order.
On the settings page you can set a default value but this can be adjusted on the fly on the Order product view depending on your requirements.
For example, to cover demand for 30 days, for a product that sells 2 units per day, you would be suggested to order 60 units, minus any leftover stock.
Days of stock also works as a threshold when a product shows up as Order in X days under Order now tab. This will happen when the remaining inventory covers demand for smaller period than Days of stock but higher than Lead time + Safety stock combined.