Ok, I think I got it.
The client is the docker command installed into OS X.
The host is the Boot2Docker VM.
The daemon is a background service running inside Boot2Docker.
This variable tells the client how to connect to the daemon.
When starting Boot2Docker, the terminal window that pops up already has DOCKER_HOST set, so that’s why docker commands work. However, to run Docker commands in other terminal windows, you need to set this variable in those windows.
Failing to set it gives a message like this:
$ docker run hello-world
2014/08/11 11:41:42 Post http:///var/run/docker.sock/v1.13/containers/create:
dial unix /var/run/docker.sock: no such file or directory
One way to fix that would be to simply do this:
$ export DOCKER_HOST=tcp://192.168.59.103:2375
But, as pointed out by others, it’s better to do this:
$ $(boot2docker shellinit)
$ docker run hello-world
Hello from Docker. [...]
To spell out this possibly non-intuitive Bash command, running boot2docker shellinit returns a set of Bash commands that set environment variables:
export DOCKER_HOST=tcp://192.168.59.103:2376
export DOCKER_CERT_PATH=/Users/ddavison/.boot2docker/certs/boot2docker-vm
export DOCKER_TLS_VERIFY=1
Hence running $(boot2docker shellinit) generates those commands, and then runs them.