L (length) is the distance between the character and the target.
(dx,dy,dz) is a vector describing the direction and distance from the character to the target. The magnitude of this vector is determined (L) and the vector is then divided by it; this "normalizes" the vector - its magnitude is now 1. The vector is multiplied by the character's speed (c\vel, which is named incorrectly and should be called c\speed!) then added to the character's position with TranslateEntity.
All this means that the character will move toward the target by a distance of c\vel.
(dx,dy,dz) is a vector describing the direction and distance from the character to the target. The magnitude of this vector is determined (L) and the vector is then divided by it; this "normalizes" the vector - its magnitude is now 1. The vector is multiplied by the character's speed (c\vel, which is named incorrectly and should be called c\speed!) then added to the character's position with TranslateEntity.
All this means that the character will move toward the target by a distance of c\vel.