Source : Free On-Line Dictionary of Computing

BibTeX
     
         A {Tex} extension package for bibliographic
        citations, distributed with {LaTeX}.  BibTeX uses a
        style-independent bibliography database (.bib file) to produce
        a list of sources, in a customisable style, from citations in
        a Latex document.  It also supports some other formats.
     
        BibTeX is a separate program from LaTeX.  LaTeX writes
        information about citations and which .bib files to use in a
        ".aux" file.  BibTeX reads this file and outputs a ".bbl" file
        containing LaTeX commands to produce the source list.  You
        must then run LaTeX again to incorporate the source list in
        your document.  In typeset documents, "BibTeX" is written in
        upper case, with the "IB" slightly smaller and with the "E" as
        a subscript.  BibTeX is described in the {LaTeX} book by
        Lamport.