an application letter is submitted together with your curriculum vitae/resume to the company/person you want to work for.
it is used to show your intent on applying for a certain job/position.
you write in your application letter: a little about yourself (it could maybe just your name), how you found out about the job vacancy, how much you are interested to have that job, and that you have the qualities they are loking for.
:-) well technically dere is nothing like thtt .. but u can say its an application to smthing enclosed or written in a letter.. u can also call it as a kind of resume / bio data sheet
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