It converts AC power from your wall socket into DC power that the PC components use. There are three different voltage ratings that are produced in an ATX12 PSU: 12V, 5V, and 3.3V. Different voltages are used by different components in the PC. Here is a great THG article on picking PSUs: http://www.tomshardware.com/reviews/power-supply-psu-review,2916-7.html