Every SQL Server 2005 database has two operating system files: a data file and a log file.

Data files contain data and objects such as tables, indexes, stored procedures, and views. Log files contain the information that is required to recover all transactions in the database.

There can be two kinds of data files :
Primary datafile - The primary data file contains the startup information for the database and points to the other files in the database. User data and objects can be stored in this file or in secondary data files. Every database has one primary data file. The recommended file name extension for primary data files is .mdf.

Secondary datafile - Secondary data files are optional, are user-defined, and store user data. Secondary files can be used to spread data across multiple disks by putting each file on a different disk drive. Additionally, if a database exceeds the maximum size for a single Windows file, you can use secondary data files so the database can continue to grow.

The recommended file name extension for secondary data files is .ndf.