What is meant by TFS and its functionality ??

You can find more information about TFS, an how you can configure it and manage it here: http://msdn.microsoft.com/en-us/library/vstudio/ms252473.aspx.

Team Foundation Server (commonly abbreviated to TFS) is a Microsoft product offering source control, data collection, reporting, and project tracking, and is intended for collaborative software development projects read more http://en.wikipedia.org/wiki/Team_Foundation_Server

useful link : http://www.aymanzaza.com/become-a-tfs-expert/

Team Foundation server, is where you can manage the whole wource code, reporting, managing, monitoring.. etc. 

TFS (Team Foundation Server ) is Microsoft's solution for source control and configuration management.
Its also good for Project Tracking and works well with CMMI standards and Agile processes.

TFS is an underlying repository on which all Microsoft products and some other also are integrated through this. And you can manage number of things through TFS e.g. Source control, builds, testing, etc.

Team Foundation Server (TFS) at its heart is a process improvement tool.there isn't any guarantee that your process will improve because you're using it, but if that isn't your goal then you may need to rethink your decision to use it. TFS is not just a version control tool. Or rather, it is a version control tool -- and an excellent one at that -- but using a version control tool isn't difficult and really doesn't require a lot of thought or acceptance. A version control tool is used by a team or teams and versions their files. That's it. If you're using TFS only for version control, then you're wasting your investment. It's the rest of TFS that makes it truly special.

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People use it for collaborative approach for project, though I have been using svn quite famous and reliable too :)