dBFS means "decibels full scale". It is an abbreviation for decibel amplitude levels in digital systems which have a maximum available level (like PCM encoding). 0 dBFS is assigned to the maximum possible level.
There is still the potential for ambiguity with RMS amplitude measurements, since some use the RMS value of a full-scale square wave for 0 dBFS (which corresponds with a 0 dBFS peak amplitude measurement), and some use a full-scale sine wave (which corresponds with typical analog RMS measurements).
The measured dynamic range of a digital system is the ratio of the full scale signal level to the RMS noise floor. The theoretical dynamic range of a digital system is often derived by the equation
This comes from a model of quantization noise equivalent to a uniform random fluctuation between two neighboring quantization levels. For instance, 16-bit audio has a quoted dynamic range of 96.33 dB.
To make an equivalent measurement of a system's noise floor, the full-scale square wave convention is used. A signal which fluctuates randomly between two neighboring quantization levels will measure at −96.33 dBFS with this convention.