DR is how much incoming physical damage is blocked by armor. After a successful hit and any saving throw, subtract DR from the damage.
A natural 20 on an attack ignores DR.
DR (Damage Reduction): DR reduces all Physical damage types: Bludgeoning, Piercing, Slashing, Fire, Cold, Lightning, Thunder, Acid, Force, Radiant, and Necrotic. DR does NOT reduce Psychic, Poison, Disease, or Suffocation damage.
Rolling a natural 20 during an attack ignores DR damage reduction value.
Example: You roll 1d6 for damage and get 5. The target's chainmail has DR 3, so you deal 2 HP damage.