Pot odds is the amount of money to call vs. the amount of money already in the pot.

Calling $1 into a $3 pot would give you 3:1 pot odds.

This is balanced against your outs to determine if a call is +EV. For instance, you pick up a flush draw on the turn. You don't hold any over cards, but we'll assume if you river the flush, you will hold the best hand. At this point, you have 9 outs, with 46 cards left in the deck (we only subtract the cards we know about, so your two hole cards plus 4 on the board). This means we have a 9/46 change to win the hand, or about 4:1 (20%). You would need to make sure the odds to win are greater than your odds to call for it to be +EV. In this case, calling $2 into a $10 pot would be correct, but calling $5 would not. DUCY?

Also, we use pot odds/draws to determine our betting when we want to give our opponent incorrect odds to call.