It is a parasitic treatment of fish where fish are bathed in a mixture of seawater and formaldehyde [formalin] usually for 30-45 minutes. The formalin is a toxin which is supposed to kill the parasite. Formalin is non-discriminatory. Meaning that it is a toxin to fish as well as parasite, thus formalin bathes should be done under close scrutiny by the hobbyist and within the limited boundaries of its uses and effectiveness.
[Kinda of like chemotheraphy for fish].