Radio Data System (RDS) is used to send information with radio broadcasts, which can help with tuning in to a channel, or display text on the radio's display, such as information about the currently broadcasted program, or the weather. RDS only works on FM radio.
RDS supplies the radio with a few functions that are very helpful:

Program Identification (PI)
PI is used for storing the country from which is broadcasted, the type of program (local, national), and which radiostation it is. Every broadcasted show has a unique PI code. If the frequency at which the show is broadcasted suddenly changes, it is unnecessary to look up the new frequency because the receiver will do it for you.

Program Service (PS)
PS supplies information (8 characters long) about the broadcasted show, such as what kind of music they play, or if it's a local channel, the name of the city.

Alternative Frequencies (AF)
AF gives information about the frequencies at which the same program is broadcasted. This information is used by the RDS receiver to change stations when the signal gets too weak.

Traffic Program (TP) / Traffic Announcement (TA)
TP is the code that tells the receiver if the station broadcasts traffic information. The TA code is transmitted at the time the traffic information is broadcasted. When turned on, the radio will automatically turn up the volume when traffic information is supplied.