A discounted cash flow analysis, or DCF, values a business based on the present value of its future cash flows. Analysts usually forecast unlevered free cash flow for a defined period, often several years, because they cannot project every future year individually. Terminal value captures all cash flows beyond that explicit forecast period.
You calculate terminal value as of the end of the final forecast year. You then discount it back to the valuation date using the weighted average cost of capital, or WACC, just as you discount the forecast-period cash flows.