Precum is when a man is in a state of arrousal and drops of fluid are excreted to prepare the penis for ejaculation. Precum also cleanses inside of penis to rid it of urine and precum is also a lubrication.
The more common term for pre-*** is being "wet". The next time you get you DH/BF arroused with his pants on, you may notice a wet spot. That's pre-***. It's the same principle as with us ladies. Lubrication.