A DCC decoder is a small electronic device used in model railroading to control the speed, direction, and functions of a locomotive. It receives digital commands from a DCC controller and translates them into actions for the train, allowing for more precise operation compared to traditional analog systems. These decoders can also manage additional features like lights and sound effects, enhancing the realism of the model train experience. By using a DCC system, multiple trains can run independently on the same track, making it a popular choice among hobbyists for its flexibility and ease of use.