As the first answer said, it's roughly the line that divides North and South Korea, but not exactly.
"The parallel divided the peninsula roughly in the middle. In 1948, the dividing line became the boundary between the newly independent countries of North and South Korea. At the end of the Korean War (1950-1953), a new border was established through the middle of the Demilitarized Zone, which cuts across the 38th parallel at an acute angle, from southwest to northeast. The 38th Parallel was also the place where the cease-fire was called to end the fighting."
Map: http://upload.wikimedia.org/wikipedia/commons/9/97/Korean_dmz_map.png
More details: http://en.wikipedia.org/wiki/Division_of_Korea#Establishment_of_two_Koreas
