This term is used to describe when an offensive team is required to punt on the fourth down because they failed to secure a first down during the first three plays of the drive.
A down begins with a snap or free kick and ends when the player who is in possession of the ball is declared by an official as being down. The down is considered secured after the offense has moved the ball 10 yards or more down the field. Failure to secure the first down during the three plays of drive will require the team to punt. The team will used this punt to try and get a field goal which will award three points if successful. In addition to the having the chance to gain three points, a punt in a three-and-out has the advantage of allowing the team the chance to force the opposition further down the field.