Short for "down low" - meaning men who have sex with men but don't consider themselves "gay." They usually have girlfriends or wives but secretly have sex with men too. They can't bring themselves to think of themselves as gay because to them it means weak and effeminate. But they are still undeniably homo- or bi-sexual, even if they would never admit it. The phrase is most often used in association with African-American men, but the concept is by no means limited to them.
The concept was brought into the public consciousness by the book "On the Down Low" by Keith Boykin, which was then profiled on Oprah. The lifestyle is also blamed for the huge rise in HIV rates among straight black women - their men fuck other men, don't use condoms because in some twisted way they see that as making them "more gay," catch HIV and pass it on their women.
I did briefly discuss the subject with an openly gay black male, and it was his opinion that the DL phenomenon is not a matter of homophobia, internalized or otherwise, but simply a blurring of the lines, where an exclusive definition of hetero or homo does not matter to them - they just fuck whoever they want to without labeling it.