This is an great function of the OBD2 system in vehicles that allows you to find out what and why your engine check light came on. So basically what it does is whenever your engine check light comes on it will take a freeze frame and record all data at that time.
This data is then stored in your vehicles memory and can be accessed with an OBD2 scan tool. This is part of the requirements of the OBD2 system so that it has to record these data when your check engine light comes on. This data is not over written if that fault light comes on and then off then back on again. It will stayed stored in the vehicles memory and only be cleared if there is an DTC reset done with a scan tool.
The freeze frame data shows you a snap shot of your engines data when the check engine light comes on!
Now to access this information you use a OBD2 scan tool and when you access the tool your will see faults that have come up and beside this data there will be a camera type icon and if you click on this it will show you the freeze frame data. This is very important as it shows you basically what went wrong and where in the car the problem is located so that you can fix it. Much more handy than just having the fault code.