A “DMX Terminator” is used when you are using alot of DMX fixtures on one single DMX line (Universe). It removes a lot of noise and flickering on the DMX Tx line which improves the reliability of your fixtures.
When a DMX signal has travelled to the end of your DMX line if it is not terminated you get something which is refered to as a “shadow” signal bouncing back along the line which can cause all sorts of problems with you DMX fixtures.
The longer the DMX cable run the greater the risk of getting this bounce back.

Rule of thumb DMX lines should always be terminated. It is often claimed that DMX devices work without termination, however this is generally due to luck rather than good design.