It references the name of a variable using another variable. For example:
$foo = 'bar';
$$foo = 'hi';
echo $bar; // outputs: hi
It's equivalent to using braces like so:
$foo = 'bar';
${$foo} = 'hi';
echo $bar; // again, outputs: hi
You can combine normal text with the value of a variable to set another variable, like so:
$foo = 'bar';
${'foo_' . $foo} = 'hello!';
echo $foo_bar; // outputs: hello!