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DoT stands for Damage over Time, which denotes the damage dealt over a fixed period by a weapon or Ability after it has been used. For example, the Biotechnician's Reconstruction Ability causes Damage over Time, and a critical hit from a weapon that deals Incendiary damage will apply a DoT to the target.
A lot of mobs inflict Damage over Time effects, and while a DoT is not instantly lethal they can still bring the toughest characters to their knees. You should always be alert and watching your health bar, as a Virulent DoT will lower your health directly instead of having to go through your armor first. Be ready to use a Med Pack or Healing Disc in these situations.
See: Wikipedia:Damage over time for more information.