Back in the day 2600 hertz was the frequency that AT&T put on all of their long distance lines so that they could distinguish between a free line and one that was in use. If a line had a 2600 hertz tone on it, then that line was available.

A man named John Draper realized that a toy whistle he got in a Captain Crunch box was able to easily generate a 2600 hertz tone. Draper figured out that he could dial a number, blow his whistle, and make a free long distance phone call to anywhere in the world. He shared his knowledge with the phreak community and has hence forth been referred to as Captain Crunch.

Now days long distance phone companies use Signaling System 7, which is a little more difficult to phreak than just blowing a whistle.