Docker is a Container.
While a Virtual Machine is a whole other guest computer running on top of your host computer (sitting on top of a layer of virtualization), Docker is an isolated portion of the host computer, sharing the host kernel (OS) and even its bin/libraries if appropriate.
To put it in an over-simplified way, if I run a CoreOS host server and have a guest Docker Container based off of Ubuntu, the Docker Container contains the parts that make Ubuntu different from CoreOS.
Docker has its uses for hosting, and development. This is a useful tutorial to get started.