It is the initialism (not acronym) for CD Digital Audio. In other words: this lets you play music and audio CDs through the computer's speakers.
Usually, CD-ROM drives have a 4-pin analog audio output on the back. If you connect this output to the matching motherboard input, you can start a compact disc playing in the drive, and it will play though the computer's sound system, without using the host CPU. Some CD players even had an LCD panel and track selection controls on the front. Others sometimes had a single "Play" button. Either way, users could control CD playback from an app on the computer.