A file definition is a record layout, that is, the lines of COBOL code that tell how a given record on a database is laid out. The SQL equivalent is the list of the columns that make up a table.
Most COBOL shops extract their file definitions out of the program code and put them into separate include files. Putting a record layout into an include file means that several programs can use the same layout and always be sure that they get the latest version. Thus a program that writes output will always be in sync with a program that reads the same data as input.
The convention for most PC-based COBOL compilers is to give the include files . REC extensions.
The COBOL Import Utility does not require you to extract record layouts into include files. You can leave your file definitions embedded within the COBOL program code. In this case, the user would just name the entire xxxxxx.COB program as the input file, instead of naming individual xxxxxx.REC files.