Source : Free On-Line Dictionary of Computing

last call optimisation
     
        Normally when procedure A calls procedures B, C, .., Z, the
        environment of procedure A is only discarded when procedure Z
        returns and procedure A itself terminates.  Using last call
        optimisation, A's environment is discarded as Z is called.
        This allows arbitrarily deep nesting of procedure calls
        without consuming memory to store useless environments.
     
        A special case of this is tail recursion optimisation where
        the last procedure called is the calling procedure itself.