'D' refers as Digital. The name itself, 'slr' or 'Single Lens Reflex', refers to the hinged mirror that bounces the light passing through the lens up to the viewfinder for framing then flips out of the way when you press the shutter to allow the light to hit the sensor (or film).
As the (simplified) diagram above shows, the mirror inside an SLR reflects the image formed by the lens up to the optical viewfinder (via a focusing screen and prism). When the picture is taken the mirror flips out of the way to allow the light to fall directly onto the sensor (or film), which sits behind a mechanical shutter. The mirror is also flipped up for live view operation (where the sensor is used to provide a live video feed directly to the screen on the back). More on this - and on the newer 'mirrorless' hybrid cameras at the bottom of this page.
creadit to: http://www.dpreview.com/