A hook is a location in the vBulletin PHP code that triggers events, which can be used to execute external scripts or code; such as for a plugin. The code is executed within the context and scope of the location of the hook.
Hooks in the code look like this:
($hook = vBulletinHook::fetch_hook('unique_hook_id')) ? eval($hook) : false;
In this instance, the hook is called 'unique_hook_id'.