The degree of unsaturation tells you how may rings and multiple bonds are present in a compound provided you know the molecular formula of the compound.
Knowing the degrees of unsaturation make it easier to figure out the molecular structure and also helps when double-checking the number of pi bonds and/or cyclic rings.
Formula to calculate degrees of unsaturation.

A Pi bond is a covalent bond resulting from the formation of a molecular orbital by side-to-side overlap of atomic orbitals along a plane perpendicular to a line connecting the nuclei of the atoms.
Example:
Suppose you have a compound that has 1 Pi bond and two rings. Calculate it degree of unsaturation.

Therefore, the compounds DoU is 3.