I don't use Dreamweaver so the verbiage may be different, but...
Assuming that this is in reference to ftp settings, I believe the Host Directory refers to a specific directory on the host server that you will upload your website files to, ex:
Host name: your.domain
userid: youruserid
password: yourpassword
Host Directory: /html (or whatever your website host indicates)
Some hosts require this to be set manually, others set it automagically.
The appropriate data for your host should be included in the welcome email you hopefully received from your domain/website host when you ordered hosting.
hth