An MDS matrix (Maximum Distance Separable) is a matrix representing a function with certain diffusion properties that have useful applications in cryptography.
Technically, an $m\times n$ matrix $A$ over a finite field $K$ is an MDS matrix if it is the transformation matrix of a linear transformation $f(x)=Ax$ from $K^n$ to $K^m$ such that no two different $(m+n)$-tuples of the form $(x,f(x))$ coincide in n or more components. Equivalently, the set of all $(m+n)$-tuples $(x,f(x))$ is an MDS code, i.e. a linear code that reaches the Singleton bound.