Dom0, or domain zero to expand the abbreviation, is the initial domain started by the Xen hypervisor on boot. The Xen hypervisor is not usable without Domain-0 (“dom0”).
The dom0 is essentially the “host” operating system (or a “service console”, if you prefer). As a result, it runs the Xen management toolstack, and has special privileges, like being able to access the hardware directly.
It also has drivers for hardware, and it provides Xen virtual disks and network access for guests each referred to as a domU (unprivileged domains). For hardware that is made available to other domains, like network interfaces and disks, it will run the BackendDriver, which multiplexes and forwards to the hardware requests from the FrontendDriver in each DomU.