Discounted Cash Flow (DCF) is a financial valuation method used to estimate the value of an investment based on its expected future cash flows. It involves projecting the cash flows that an investment will generate over time and then discounting them back to their present value using a specific rate, often reflecting the risk of the investment. The DCF method helps investors determine whether an investment is worth pursuing by comparing the present value of expected cash flows to the initial investment cost. This approach is commonly used in valuing businesses, real estate, and other assets, making it a vital tool in finance and investment analysis.