A hotfix is a single, cumulative package that includes information that is used to address a problem in a software product, i.e. a software bug.
During the software development cycle, when in-between regularly scheduled release dates for software upgrades if a problem requiring immediate resolution occurs a development team may release a "hotfix" to resolve the problem.
A hotfix usually is highly targeted at the specific problem requiring the immediate attention. Often times this is accomplished by simply reverting back recent changes so that the issue can be investigated more thoroughly without impeding the production environment, this is often times referred to as "rolling back".