Every DVD contains one or more sets of files named VTS_XX_Y.VOB, where XX and Y are numbers, between 01 and 99 for XX and between 0 and 9 for Y. For example, you might see VTS_01_1.VOB, VTS_01_2.VOB, VTS_02_0.VOB, VTS_01_1.VOB, and VTS_02_2.VOB. All files with the same value for XX, along with associated files named VTS_XX_0.IFO and VTS_XX_0.BUP, are referred to as a VTS or Video Title Set.
Files ending with .IFO or .BUP contain the virtual machine instructions that tell a player what to play when. All files with the .VOB extension contain video, audio, and usually subpictures. VOB files numbered 0, such as VTS_01_0.VOB or VTS_34_0.VOB only contain menu content. These files are optional, and since many DVDs only have menus in a single VTS, they will also have only a single VTS_XX_0.VOB file.
They're called Video Title Sets because they contain one or more Titles.